THRIVE HOW INTERNATIONAL COMPANIES ARE STRENGTHENING U.S. COMMUNITIES Published by

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with research from Daniel J. Ikenson Director of Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies TABLE OF HELPING CONTENTS U.S. COMMUNITIES 3. OFII MEMBER COMPANY SNAPSHOT THRIVE MEASURING THE SOCIAL GOOD PROVIDED BY 5. INTERNATIONAL COMPANIES As you will discover, international companies like Sodexo, THE VALUE OF ESG Stop & Shop and Philips are making an incredible impact on lo- 7. cal U.S. communities. Often this work goes unnoticed, perhaps because drawing attention to these efforts runs counter to the 8. OUR ANALYSIS cultural traditions of many international companies. Drawing on the expert analysis of Daniel Ikenson, an economist FINDINGS at the Cato Institute, this report illuminates—and quantifies—the 9. outsized role that international companies play in generating CONCLUSION social good. 11. Supplementing that rigorous analysis are a few real-world ex- STORIES FROM ACROSS AMERICA amples of how OFII member companies help communities 13. across the country thrive. 25. STORIES FROM THE NORTHEAST 33. LEADERS IN ENVIRONMENTAL SUSTAINABILITY 35. STORIES FROM THE MIDWEST 39. LEADERS IN SOCIAL RESPONSIBILITY 41. STORIES FROM THE SOUTH 47. LEADERS IN ETHICAL GOVERNANCE 49. STORIES FROM THE WEST 51. APPENDICES 1 2 OFII MEMBERS OFII MEMBERS Representing the U.S. operations of many of the world’s leading international companies, EACH EMPLOY OFII ensures that policymakers at the federal, state and local level understand the critical role that foreign direct investment (FDI) plays in America’s economy. ON AVERAGE MORE THAN ABB Inc. Daimler Kering SAP America Ahold Delhaize Danfoss Kerry Sasol Chemicals (USA) LLC Airbus Group, Inc. Danone Kudelski Group Schindler Elevator Corporation 12,000 AMERICANS. Air Liquide USA Dassault Falcon Jet Corp. LANXESS Schlumberger Akzo Nobel Inc. Dassault Systemes The LEGO Group Schneider Electric USA Alfa Laval, Inc. (USA) DENSO Lehigh Hanson Schott North America Alibaba Group Deutsche Telekom Liberty Utilities Shell Oil Company Allianz of North America DHL L’Oréal USA, Inc. Shire Pharmaceuticals Anheuser-Busch Diageo, Inc. Louisville Corporate Services, Inc. Sibelco Group Membership by Region APG Direct Energy LVMH Moet Hennessy Louis Siemens Corporation Membership by Region APL Limited DLI North America Vuitton Signify Aptiv DSM North America LyondellBasell Smith & Nephew, Inc. Arca Continental Electrolux North America Maersk Inc Smithfield 10% Astellas Pharma US, Inc. EMD Holding Mahindra Smiths Group AstraZeneca Pharmaceuticals Emera, Inc. MAHLE Industries Sodexo AVANGRID Enel Green Power North Magna International Softbank Group BAE Systems America Mallinckrodt Solvay America 18% Balfour Beatty ENGIE Marvell Semiconductor Sony Corporation of America Barrick Gold Corp. of North E.ON North America Mazda Spotify America Ericsson McCain Foods USA SSAB Americas 70% Barry Callebaut Essilor USA Medtronic, Inc. Standard Chartered Bank BASF Corporation Experian Michelin North America, Inc. Sumitomo Corp. of America Bayer Corp. Ferguson Enterprises, Inc. Mitsubishi Electric US, Inc. Swiss Re BBA Aviation Fresenius Kabi USA, LLC. Mizuho Bank, Ltd. Syngenta Corporation B. Braun Medical, Inc. Fresenius Medical Care National Grid Takeda North America Americas Asia BHP Billiton FUJIFILM Holdings America NEC Corporation of America The Tata Group Europe Middle East & Africa BIC Corp. G4S Nestlé USA, Inc. Tate & Lyle Americas Asia Bimbo Bakeries Garmin International, Inc. Nissan TE Connectivity bioMérieux GE Appliances, a Haier Nokia Teva Pharmaceuticals USA Europe Middle East & Africa BlueScope Steel North America Company Nomura Holding America, Inc. Thales USA, Inc. BNP Paribas Getinge Group Novartis Corporation Thomson Reuters Boehringer Ingelheim Corp. GlaxoSmithKline Novo Nordisk TOTAL Holdings USA, Inc. Bombardier Inc. Global Atlantic Financial Ørsted North America Inc. Toyota Motor North America Bosch Company Panasonic Corp. of North America Trafigura BP Grifols Pearson Inc. Transamerica Membership by Industry Bridgestone Americas Holding Grundfos Permobil UBS Brookfield Asset Management Heineken USA Pernod Ricard USA UCB BT Henkel Corporation Philips North America LLC Umicore Bunge Ltd. Hitachi, Ltd. Pirelli Unilever 8% Bunzl USA, Inc. Honda North America POSCO Vivendi Capri Holdings HSBC Bank North America QBE the Americas Voith Holding, Inc. CEMEX USA Huhtamaki Randstad North America Volkswagen of America, Inc. CGI Group Hyundai Motor America Rassini International Inc. Volvo Group North America Chubb IKEA North America Services, LLC. RELX Group Westfield LLC CN Imerys Restaurant Brands International White Mountains, Inc. 10% CNH Industrial Infineon Technologies Rio Tinto America Willis Towers Watson Compass Group USA Americas Corp. Roche Holdings, Inc. Wipro Inc. 67% Continental Corporation InterContinental Hotels Group Rolls-Royce North America Inc. Wolters Kluwer U.S. Corporation Cosentino Group Indivior PLC Royal Bank of Canada WPP Group USA, Inc. CSL Behring Ipsen Biopharmaceuticals, Inc. SABIC Zurich Insurance Group Credit Suisse Securities (USA) John Hancock Life Insurance Co. Safran USA CRH Americas, Inc. Johnson Controls Samsung Daikin North America Johnson Matthey Sanofi US Manufacturing Information Finance & Insurance Banking Professional, Scientific & Retail Trade Technical Services Other Industries 3 4 MEASURING THE INTERNATIONAL SOCIALTABLE OF GOOD COMPANIES PROVIDED BY INCREASED INTERNATIONALCONTENTS CHARITABLE COMPANIES CONTRIBUTIONS BY

In an environment as diverse On average, and increasingly and dynamic as the U.S. econo- over the years, the U.S. subsid- my, demand and opportunities iaries of companies headquar- for investment are plentiful. tered abroad—referred to as international companies in this To remain atop global value report—have contributed dis- chains and at the technological proportionately to U.S. econom- frontier, the U.S. economy ic performance, as observed requires continuous inflows across a variety of objective of fresh capital to replenish measures. the machinery, software, laboratories, research centers Even though these entities as a % and high-end manufacturing group account for less than two 123 facilities that harness our human percent of U.S. businesses with capital, animate new ideas and payrolls, international compa- create wealth. nies account for: OVER THE PAST DECADE, 5.6 % 6.4 % of all of U.S. GDP 25 % of U.S. private-sector (private-sector significantly above the 19 percent of growth seen in the overall exports employment value add) private sector over that same period.

26 % higher worker 16 % 19 % compensation of all of all than the U.S. private-sector corporate federal private-sector R&D spending taxes paid average

These direct contributions—as impressive as they are—provide only a partial picture of the impact that international companies have on American prosperity. 5 6 THE VALUE OF ESG OUR Academic literature finds that corporate policies related to environ- mental, social and governance (ESG) matters are good predictors of financial and economic success. Among the various academic findings are that: ANALYSIS

A POSITIVE CORRELATION EXISTS BETWEEN CORPORATE One of the most commonly cited sources for reliable information on these metrics are the Morgan Stanley Capital International (MSCI) ENVIRONMENTAL RESPONSIBILITY AND LONG-TERM STOCK ESG Indexes. MSCI ESG conducts research and catalogues compa- 1 nies’ commitments to responsible practices in the realm of environ- PERFORMANCE; mental, social and governance policies.

Raw data are collected that capture the risk exposure, practices and A ROBUST RELATIONSHIP EXISTS BETWEEN CORPORATE SOCIAL performance of some 8,600 global companies, from sources includ- RESPONSIBILITY (CSR) AND HIGH CREDIT RATINGS, SUCH THAT ing government statistics, corporate annual reports, proxy filings, securities filings, environmental databases, websites, media sources FIRMS WITH GOOD CSR SCORES OBTAIN LOWER FINANCING and NGO publications. COSTS BECAUSE OF IMPROVED CREDITWORTHINESS BY WAY The database used to analyze ESG factors included more than 150 OF IMPROVING RELATIONS WITH STAKEHOLDERS, SIGNALING metrics for over 7,000 companies from 81 different countries. The met- rics are derived from raw data that measure companies’ exposure to OPERATIONAL AND FINANCIAL EFFICIENCY AND REDUCING ESG risks and their performance in mitigating those risks. THE RISK OF BAD BEHAVIOR; 2 Analyzing this data and grouping companies based on their global headquarters’ location, allows us to better quantify the relative ESG strength of international companies, including members of the Orga- COMPANIES WITH MORE WOMEN ON THEIR BOARDS GENERATE nization for International Investment (OFII members). BETTER RETURN ON EQUITY; 3 AND

GOOD ESG PERFORMANCE LOWERS BOTH THE COST OF EQUITY AND THE COST OF DEBT, WITH AN EMPHASIS ON THE IMPACT OF GOOD CORPORATE GOVERNANCE. 4

A meta-study published in 2015, which considers the primary and secondary data of previous academic review studies, combining the findings of nearly 2,200 individual studies, is considered the most exhaustive overview of academic research on this topic. Its main conclusions were that roughly 90 percent of those studies found a non-negative relationship between the implementation of ESG policies and corporate financial performance; a large majority of the studies reported positive relationships; and that positive relationship appears to be stable over time. 5

7 8 FINDINGS TABLE 1 OFII MEMBER COMPANIES OUTPERFORM THE U.S. AVERAGE As you would expect, introducing high-performing, time-tested, top-tier companies into the pool of domestic entities in an indus- OFII members regularly score higher than the average U.S. company on a variety of try can only improve the economic outcome. Companies abroad key ESG indicators. Here are percentages by which they exceed the U.S. average: that rise to the tops of their industries, by definition, have histories of making better than average choices. OVERALL WEIGHTED AVERAGE SCORE 16.5% Those decisions about design, production, distribution, marketing ENVIRONMENTAL PILLAR SCORE 31.4% and customer relations generated results that put these companies Product Carbon Footprint Score 117.2% in better positions to raise capital, expand in their industries, diversi- Carbon Emissions Score 37.0% fy into others and ultimately qualify to compete globally. Opportunities in Clean Tech Score 36.6% Biodiversity and Land Use Score 28.3% 17.1% WITH OVERALL AVERAGE SCORES SURPASSING 16 PERCENT SOCIAL PILLAR SCORE Privacy and Data Security Score 65.5% HIGHER THAN THE SCORES OF U.S. DOMICILED COMPANIES, IN- Human Capital Development Score 64.3% 36.8% TERNATIONAL COMPANIES—SPECIFICALLY, OFII MEMBERS—ARE Health and Safety Score GOVERNANCE PILLAR SCORE 2.4% RAISING AMERICA’S ECONOMIC, LABOR, ENVIRONMENTAL AND Gender Diversity Score 37.2% SOCIETAL ADVANTAGES. Anti-Corruption and Stability Score 19.4% Corporate Governance Score 5.5%

The premium delivered from international companies is most pro- Source: OFII analysis of Morgan Stanley Capital International (MSCI) ESG Indexes, accessed Fall 2018. nounced on policies related to environmental practices (31.4%), but also significant on social policies (17%). Among the most striking findings Likewise, as policymakers and the Table 1 provides a summary of how OFII member companies com- from this analysis are the interna- marketplace compel companies pare to the overall U.S. private sector. tional premiums attached to poli- to do more to protect data and en- cies that have become extremely sure privacy, those companies that For example, OFII members scored 117.2 percent higher than the important for workers, manage- have already adopted effective average U.S. company in terms of their product carbon emissions ment, shareholders, consumers policies will be ahead of the curve. score. That is just one key indicator that contributes to the overall and policymakers alike: human And the fact that they are already Environmental Pillar Score, where OFII members registered 16.5 per- capital development and data committed to this objective reflects cent higher than the average U.S. firm. Appendix A provides a full privacy. positively on the company’s man- description of each of these key indicators. agement philosophy. Companies that engage in policies geared toward managing and As the data show, OFII’s member cultivating their human resourc- companies score better than U.S. es by offering formalized training domiciled companies do when programs, and actively measure it comes to protecting data and and seek to improve the satisfac- ensuring privacy, ranking, on aver- tion of their employees, tend to be age, 65.5 percent higher. more successful. On this metric, OFII’s member companies offer a premium of 64.3 percent over the average U.S. employer. 9 10 CONCLUSION

INTERNATIONAL COMPANIES ARE AMONG THE MOST SUCCESSFUL FIRMS IN THE WORLD, HAVING PROVEN THEIR METTLE IN LOCAL MARKETS, OUTPERFORMING COMPETITORS, AND THEN MOVING ON TO COMPETE ON THE GLOBAL STAGE.

As the number of international companies and the amount of their investments rise in the United States, the stock of companies embracing these best practices and the likelihood of wider adap- tation throughout the U.S. private sector will also increase, leading to better financial and economic outcomes.

As long as creating value, growing GDP, improving environmen- tal outcomes and providing high-quality, well-paying jobs for U.S. workers remain public policy objectives, international companies will have vital roles to fulfill.

11 12 ACROSS AMERICA GRIFOLS OVER 220 U.S. LOCATIONS GLOBAL HQ: SPAIN

Grifols created the Commu- an extra set of hands at the nity Outreach Program for its local Humane Society. network of donor centers to help generate awareness for Some centers are near military the importance of plasma do- bases and feed the troops nation and the diseases that alongside the USO, and others plasma-derived medicines help may help clean up the roads treat. that run through their commu- nity. Grifols plasma donor centers are a neighbor of choice in Activities include partnering more than 220 locations across with more than 50 local U.S. the United States. food pantries to donate 15,000 meals to people in need, hold- Since the Community Outreach ing donation drives collecting Program first rolled out in Sep- $16,000 worth of school sup- tember 2017, Grifols plasma plies—enough to outfit more donor centers and its employ- than 150 local students with ees have participated in more backpacks and supplies to set than 4,000 community outreach themselves up for a successful events. year, and providing charitable contributions. The program tracks the out- reach, lays out best practices All of this shows how Grifols is an and establishes a minimum active, responsible and support- level of activity expected of all ive community partner. centers. The specific engage- IDENTIFYING ment efforts are left to each individual plasma donor center, as they know their own commu- nity best. COMMUNITY Some communities may need the food pantry shelves re- NEEDS stocked, while others may need

13 14 ACROSS AMERICA HEINEKEN USA WASHINGTON, SEATTLE, HOUSTON & PHILADELPHIA RESTORING GLOBAL HQ: THE NETHERLANDS

Sustainability is woven into in ways unique to their city’s URBAN the ethos of Heineken, and the needs. commitment to Brewing a Bet- ter World unites the company Heineken then set financial and its 250+ global brands. goals for each of their Cities Projects in order to raise the TREASURES Heineken USA aims to actively appropriate funds. connect with and serve the communities in which the com- For each city, Heineken had a pany does business or calls goal of raising $15,000. Heinek- home. The goal of Heineken’s en’s team was extremely Cities Project was to improve pleased that the financial goals urban areas through local his- were not only met, but sur- torical restoration projects. passed for each project. By partnering with communities In fact, four city projects gar- across the country, Heineken nered more than $40,000 in took a personalized approach funding: and was able to gain expertise from local residents about what In Washington, D.C., Heineken projects would mean the most helped repair four of Union Sta- to them. tion’s 46 legionnaire statues. In the summer of 2017, Heinek- In Seattle, it restored one of the en focused on 10 different quirkiest pieces of the city’s his- monuments and sites in U.S. tory—the prism glass sidewalks cities and partnered with the of Pioneer Square. Bruno Mars 24K Magic U.S. Tour to raise more than $400,000 Home of the world’s first domed for projects across the United stadium, Houston’s now vacant States. Astrodome will come alive again through renovations and Fans were given a chance a multi-day festival that will to receive concert tickets in showcase its new capabilities. exchange for supporting se- lect projects on Indiegogo, a Through Heineken’s Bring Phila- crowdfunding platform, offering delphia’s Rail Park to Life initia- a direct line of involvement for tive, three miles of abandoned local community members in- railroad tracks will be trans- terested in making a difference formed into a new public park.

15 16 ACROSS AMERICA MICHELIN NORTH AMERICA DRIVING NATIONWIDE HOME TEEN GLOBAL HQ: FRANCE

In 2014, Michelin North Amer- care about air pressure and SAFETY ica identified a life-threatening tread depth—but it has more to problem: Improperly main- do with their sneakers than their tained tires were contributing tires. to numerous car accidents, the number one cause of teen Capitalizing on the recent deaths in the United States. sneaker craze, Michelin Twelve percent of those crash- partnered with Vans to mo- es are directly related to poor tivate teens to get involved tire maintenance, and research in tire safety through the showed that neither parents #StreetTreadContest. nor driver’s education materi- als were equipped to educate For a chance to win a pair of teens about this important top- limited-edition Michelin-inspired ic. Vans, teens used social media to share a photo showing that In fact, only two states were they know how to check a tire’s teaching tire safety in driver’s tread depth using a penny education classes. and/or know how to check tire pressure. In response, Michelin launched the Beyond the Driving Test ini- Street Tread has been a major tiative in partnership with the success in driving teens to ac- Federation Internationale de tion and connecting the dots l’Automobile (FIA), setting a between something teenagers goal of gaining commitments are passionate about, their from all 50 states to include shoes, and a serious, life-saving consistent information about issue that is too often over- tire safety in new driver training looked, tire maintenance. materials. Michelin expects that the Street By summer 2017, all 50 states Tread experience will stick with committed to include this young adults and create dili- life-saving information in edu- gent tire-care habits that they cation materials. will in turn pass along to others. Michelin then zeroed in on moving teens from tire safety awareness to action. Teens

17 Photo courtesy of Carlos Delgado/AP Images for Michelin North America. 18 PUERTO RICO NATIONAL GRID PUERTO RICO GLOBAL HQ: THE UNITED KINGDOM

On September 20, 2017, Hur- Back in New York, 40 employ- ricane Maria struck the U.S. ees worked tirelessly behind the territory of Puerto Rico, making scenes to ensure that power its devastating mark on the lives was successfully restored to 98 of more than three million resi- percent of the San Juan district dents. by February 2018. The category four storm creat- National Grid’s commitment ed the largest power outage did not stop there—it has since in U.S. history, and the world’s continued to partner with com- second-largest power outage munities in Puerto Rico to help on record. the island rebuild from this dev- astating natural disaster. While National Grid is often called upon to provide mutu- The lasting effects of this initia- al aid to neighboring regions tive were not only that National during periods of large power Grid was able to help restore outages, the company had power for customers in a disas- never witnessed the kind of ter-stricken area, but also that devastation that this hurricane National Grid was able to build brought to a community. strong relationships in the com- POWERING munity that will continue for In response, National Grid many years to come. joined forces with the state of New York and sent 158 National Grid line-workers to the island to PUERTO restore power under unprece- dented conditions. Working 16-hour workdays with- RICO out breaks for nearly six weeks, National Grid line-workers were able to achieve nearly 90,000 incident-free work hours and re- store power to the community.

19 20 ACROSS AMERICA PHILIPS NORTH AMERICA NATIONWIDE GLOBAL HQ: THE NETHERLANDS

SUPPORTING For the 5.5 million spouses, Telehealth technology, is an- parents, siblings and other other way Philips is improving loved ones who often set aside the lives of military and veteran their personal lives and careers families. Using telehealth, care- to care for military and veteran givers can now access better VETERAN family members, it can be a monitoring systems and com- journey in total isolation. To help municate instantly with doctors. improve the lives of these care- givers with better support and Veterans are examined through access to healthcare, Philips virtual appointments via tablet CAREGIVERS partners with the Elizabeth Dole or laptop with medical profes- Foundation (EDF) and the U.S. sionals who are hundreds, or Department of Veterans Affairs even thousands, of miles away. (VA). This face-to-face interaction One of these support systems relieves patients and family is the Hidden Heroes Cities members from the burden of Program, established by the endless highway hours and EDF in 2016 to help caregivers travel expenses, making health- share best practices and pro- care more accessible and af- vide resources. The program fordable. has grown from 85 to 123 cities during Philip’s relationship with By 2018, Philips has supported the EDF. more than 3,000 military and veteran families across the Philips also partners with the VA country and helped to establish and the EDF to host education- better support for caregivers al baby showers for military par- cities alongside the EDF and VA ents—making it easier for these organizations. young parents, who are often away from their support sys- tems at home, to find a sense of community and cope under high stress.

21 22 ACROSS AMERICA

RANDSTAD NORTH AMERICA FOSTERING NATIONWIDE EMPLOYEE GLOBAL HQ: THE NETHERLANDS

Randstad With Heart, a find and donate to charitable global online corporate social organizations, while improving GIVING responsibility (CSR) communi- Randstad’s ability to quantify ty that was launched in 2018, its employees’ impact both na- connects Randstad employees tionally and globally. worldwide to further the com- pany’s collaborative take to- To further encourage charitable wards CSR. activism within the company, all full-time associates are award- Many Randstad employees ed eight paid volunteer hours were already personally in- per calendar year to use to- volved in philanthropy, using wards the cause of their choice. internal communication mech- anisms to promote their cause, In the United States alone, near- engage colleagues and raise ly half of Randstad employees funds, but there was no way to have participated in Randstad support these efforts or quantify With Heart, logging more than their impact. 14,400 hours of volunteer time and donating close to $50,000 Recognizing an opportunity in the six months since the plat- to more broadly support their form’s initial launch. employees’ CSR efforts, Rand- stad launched a new platform One particularly successful that allows employees to find initiative was Operation Care local volunteer opportunities, as Package, where dozens of field well as record their team and offices participated, creating individual volunteer efforts and care packages for U.S. troops. charitable donations. Randstad With Heart provides one location for employees to

23 24 NORTHEAST AHOLD DELHAIZE FREETOWN, MASSACHUSETTS GLOBAL HQ: THE NETHERLANDS

As part of doing business as a The Stop & Shop Green Energy grocery retailer, many of Ahold Facility is unique in that it is the Delhaize’s stores generate food only one of its kind on the east waste. One of the company’s coast, and one of only two like top priorities is the reduction of it in the United States. waste going into landfills. Unlike anaerobic digesters used In order to accomplish its in manufacturing or agricul- sustainability goal, Ahold Del- ture, the Green Energy Facility haize’s Stop & Shop Supermar- not only diverts food waste ket Company opened a state- from landfills, it transforms it of-the-art, Green Energy Facility into clean energy. In addition, CONVERTING in Freetown, Massachusetts, it generates a nutrient-rich soil that uses a natural process that is then used to make com- called “anaerobic digestion” post. to convert inedible food waste WASTE INTO that cannot otherwise be do- Ahold Delhaize’s initiative has nated, into clean energy. kept more than 70,300 tons of food waste out of American Each day, tons of inedible food landfills and generated nearly waste from 208 Stop & Shop 14,000 megawatts of clean ENERGY stores is brought to the 24,000 electricity for the adjacent 1.1 square-foot green energy fa- million sq. ft. Stop & Shop distri- cility to be processed and con- bution center since the facility verted into biogas. launched in early 2016. The biogas fuels a generator that, in turn, generates electric- ity capable of producing up to 40 percent of the energy need- ed to power heating, lighting and air conditioning systems in Stop & Shop’s adjacent distribu- tion center.

25 26 NORTHEAST BNP PARIBAS BUILDING NEW YORK, NEW YORK OPPORTUNITY GLOBAL HQ: FRANCE BNP Paribas’ approach to In fact, BNP Paribas’ investment corporate social responsibility is is the first Pay for Success con- to develop financial solutions to tract aimed at serving Ameri- FOR PTSD some of society’s most pressing ca’s veterans. The project has issues. been bolstered through the participation of Social Finance, With that in mind, BNP Paribas the U.S. Department of Veter- has recently become active- ans Affairs (VA) and local gov- VETERANS ly involved in Pay for Success ernments throughout the United contracts (PFS), also known as States. Social Impact Bonds. Through Veterans CARE, lo- For example, BNP Paribas was cal VA medical centers have a lead investor in the Veterans started delivering Individual Coordinated Approach to Placement and Support (IPS), Recovery and Employment, a personalized approach to or Veterans CARE, bond after supported employment, to up successfully partnering with the to 500 veterans over the next state of Connecticut on its first three years. Pay for Success contract. The project measures four out- Veterans CARE is a $5.1 mil- comes for success: earnings, lion Pay for Success initiative sustained competitive employ- that supports unemployed or ment, fidelity to the IPS model underemployed veterans with and job satisfaction. post-traumatic stress disorder (PTSD) in attaining competitive, This initiative has also increased compatible employment. enthusiasm and inspired many employees, creating a sense This initiative is effective be- of deep meaning in what BNP cause it uses the power of Paribas views as its core values. finance and capital markets to sustain much needed social programs, in this case aiming to improve both economic and well-being outcomes for veter- ans suffering from PTSD.

27 28 NORTHEAST

TE CONNECTIVITY PHILADELPHIA, PENNSYLVANIA GLOBAL HQ: SWITZERLAND

The TE Connectivity Founda- ensure that ongoing support is tion is committed to connecting available for those who have and strengthening communities participated in the program through access to technology across the country. and engineering for all, with a focus on women and under- Widening the lens through served populations. which students around the world view STEM careers is just The TE Connectivity Foundation one example of how TE Con- partnered with SMASH, a free, nectivity’s work with the SMASH multi-year program providing Academy is fulfilling the com- Photo courtesy of Shanice Johnson. access to technology and engi- pany’s purpose of creating a neering for under-served youth safer and more sustainable, that is successful in many re- productive and connected gions across the United States. future. The TE Connectivity Founda- SMASH scholars have outsized tion’s grant amplified the mis- success after the program: 100 INSPIRING sion of SMASH by funding the percent of scholars graduate launch of a SMASH Academy high school, 91 percent gradu- at the Wharton School of Busi- ate college, 76 percent enroll ness in Philadelphia for local in a STEM field in college and 64 high school students. percent graduate college with STEM AT a STEM degree. This funding supported a three- year intensive summer program for local teens. THE SMASH Furthermore, the TE Connectivi- ty Foundation’s funding helped ACADEMY to create an alumni network to

29 30 NORTHEAST PROVIDING TEVA PHARMACEUTICALS MOUNT SINAI, NEW YORK SUPPORT FOR GLOBAL HQ: ISRAEL

PATIENTS WITH Teva Pharmaceuticals is ded- fying patients with MCC in the icated to driving social impact healthcare system, updating through efforts focused on con- provider guidelines to treat tributing to healthy communities those with MCC and increasing and leading a responsible busi- patient access to self-manage- CHRONIC ness. ment interventions. As part of its commitment to Other complementary research address the global threat of examining combinations, or CONDITIONS non-communicable diseases, clusters, of chronic diseases set in 2017, Teva Pharmaceuticals the stage for new ways of look- launched a partnership with ing at the burden of MCC and Mount Sinai’s Arnhold Institute designing effective treatments. for Global Health in New York to develop solutions for patients Teva also has collaborated with with multiple chronic conditions other partners to support MCC (MCC). work. MCC refers to the presence of Enhancing Access2Care is a two or more chronic conditions. two-year program that expands It is a public health challenge access and improves care for impacting one-in-three people underserved populations in the around the world. United States. Funded by Teva and implemented by Direct Re- The initial phase of the part- lief and Volunteers in Medicine nership assessed the health (VIM), the program provides and cost burden of MCC and funding to VIM clinics to support uncovered insights into pa- delivery of primary and preven- tient-centered approaches for tive healthcare for patients with people with MCC. MCC. Mount Sinai, as one of the larg- From improving access to treat- est health systems in the United ment to creating new treat- States, provides a comprehen- ments for patients with two or sive picture of MCC-related more chronic conditions, Teva challenges across the health- is working to improve the qual- care system—from patients to ity of life for patients with MCC policy. in communities in the United States and around the world. Key learnings include the need to improve methods for identi-

31 32 FIGURE 1 OFII MEMBERS OFII Members Are Leaders in Lowering Product Carbon Footprint ARE LEADERS IN Higher score equals lower product carbon footprint

Global ENVIRONMENTAL Average SUSTAINABILITY U.S. Companies

OFII member companies are global leaders in environmental sus- Developing Countries tainability. Of the 24 industry group leaders that comprise the Dow Jones Sustainability Index, more than half are international compa- nies that operate in the United States. OECD Countries As our analysis shows, their overall Environmental Pillar Score, which analyzes companies’ performance across several different sustainability metrics, registers 16.5 percent higher than the average U.S. firm. OFII Member Companies OFII members also score an impressive 117.2 percent higher than the average U.S. company in terms of reducing their product carbon emissions. Source: OFII analysis of Morgan Stanley Capital International (MSCI) ESG Indexes, accessed Fall 2018.

Figure 1 shows how different groups of companies scored in the product carbon footprint metric—as well as the weighted global average for this metric. The above groups are defined as the following: • Global Average: The average score of all companies recorded that had a score (a non-missing value) for this metric. • U.S. Companies: The average score for all U.S.-based companies, of which there were 2,332. • Developing Countries: The average score for all companies based in developing countries, of which there were 1,140. • OECD Countries: The average score for all companies based in non-U.S. OECD countries, of which there were 3,117. • OFII Member Companies: The average score for all companies that are members of the Organization for International Investment, of which there were 164.

33 34 MIDWEST SODEXO CHICAGO, ILLINOIS GLOBAL HQ: FRANCE

Sodexo’s local sourcing of The partnership has enabled produce in the Chicago area Windy City Harvest to expand leverages partners across its its operations and communi- supply chain to positively im- ty programing, training over pact the community of Chica- 1,000 urban farmers, including go. teens, apprentices and ex-of- fenders, incubating over 30 To do so, Sodexo has partnered farm businesses, and providing with Midwest Foods, a wom- 1,800 healthy produce boxes to an-owned and operated re- low-income families. gional produce distributor, and the Chicago Botanic Garden’s The Local Food Committee Windy City Harvest program to formed by Midwest Foods to support small, local Chicago support Windy City Harvest has businesses and farmers by le- fostered sustainability improve- veraging Sodexo’s purchasing ments, including the reduction power to create demand for of food waste through better GROWING Chicago-grown products. demand planning and an “im- perfect produce” program. Sodexo has initiated a multiplier effect as its partners scale their Through Sodexo’s local sourcing LOCAL businesses by providing career efforts in the Chicago area, the development opportunities for company was able to develop at-risk community members, a supply chain network that is increasing access to affordable enabling positive outcomes for and nutritious choices for food the community. This includes an PARTNERSHIPS deserted communities, and increased capacity of Chica- supporting local sustainability go-based farmers, more inclu- efforts. sive access to healthy food and support for local sustainability Specifically, Sodexo has sup- efforts. IN THE ported a 34 percent year-over- year growth in produce volume WINDY CITY by Windy City Harvest.

35 36 MIDWEST TATE & LYLE BRINGING SCHAUMBURG, ILLINOIS MORE TO THE GLOBAL HQ: THE UNITED KINGDOM

As a food ingredients compa- Tate & Lyle wanted to do ny, Tate & Lyle understands the more than provide breakfasts, BREAKFAST important contribution that a though. It saw an opportunity healthy, balanced diet plays in to bring more to the breakfast creating a happy, healthy and table. fulfilling life. TABLE So, together with the school In the Chicago area, the home and staff, Tate & Lyle began of Tate & Lyle’s Global Inno- planning a true partnership— vation Centre, far too many one that helps teachers, par- students start their day without ents and students excel by a healthy breakfast, making bringing the company’s pas- success in the classroom a real sion, expertise and community challenge. spirit to them. Tate & Lyle’s Global Innovation As Enders-Salk Elementary and Centre partnered with Schaum- Tate & Lyle’s partnership deep- burg, Illinois’s District 54 Founda- ened in 2017, the connection tion to support students at their and cadence of their involve- neighborhood school—Enders- ment grew steadily. Salk Elementary—through the Food 4 Thought program. Tate & Lyle is now taking the lead on hosting lessons and The Food 4 Thought program demonstrations for Enders-Salk matches sponsors with local Elementary, including teaching schools that need help ensuring food groups to first-graders and that students start their days kicking off the fourth, fifth and with a healthy breakfast. sixth grade 2019 science fair.

37 38 FIGURE 2 OFII MEMBERS OFII Members Are Leaders ARE LEADERS in Protecting Privacy & Data Higher score equals greater privacy & data security

Global IN SOCIAL Average RESPONSIBILITY U.S. Companies

OFII member companies are global leaders in social responsibility. Not only do they help regional economies grow by sourcing much Developing Countries of their supply chain from U.S. small businesses, generating three additional U.S. jobs for every U.S. worker they hire, international com- panies pay an average of $81,000 annually in wages and benefits. That’s 26 percent more than the private-sector average. OECD Countries When an international company invests in the United States, they bring much more than the capital needed to operate. They often “import” expertise and industry know-how, including world-class OFII Member Companies workforce training programs. Whether it be a white-collar appren- ticeship program, an IT job in rural America or a manufacturing cer- tificate, American workers have opportunities to pursue high-quality careers close to home thanks to international companies. Source: OFII analysis of Morgan Stanley Capital International (MSCI) ESG Indexes, accessed Fall 2018. In fact, international companies employ 20 percent of America’s manufacturing workforce. These companies help diversify America’s economy, making it more resilient to downturns, and are deeply Figure 2 shows how different groups of companies scored in the rooted in the communities in which they operate (see Figure 2). privacy & data security metric—as well as the weighted global average for this metric. The above groups are defined as the following: • Global Average: The average score of all companies CHARITABLE CONTRIBUTIONS BY INTERNATIONAL recorded that had a score (a non-missing value) for this COMPANIES HAVE GROWN BY 123% metric. • U.S. Companies: The average score for all U.S.-based companies, of which there were 2,332. • Developing Countries: The average score for all companies 2001 $960M based in developing countries, of which there were 1,140. • OECD Countries: The average score for all companies based in non-U.S. OECD countries, of which there were 3,117. • OFII Member Companies: The average score for all 2013 $2.6B companies that are members of the Organization for International Investment, of which there were 164.

39 Source: Organization for International Investment’s Economic Bedrock report, released in October 2018. 40 SOUTH

FORMING ERICSSON DALLAS, TEXAS THE FUTURE GLOBAL HQ: SWEDEN

OF FEMALE The new mission of the Girl beta stage, the Jumpstart pro- Scouts goes far beyond its hon- gram has received an 83 per- ored legacy of cookies, crafts cent Net Promoter score in its and campfires—it is to put 2.5 first trial and is being extensively LEADERS million girls into a progressive augmented and developed by STEM (Science Technology En- the Ericsson-Girl Scouts Alliance. gineering & Mathematics) lead- Net Promoter Score is an index ership pipeline by 2025. from -100 to 100 that measures the willingness of users to rec- This mission aligns intimately ommend a solution to others. with Ericsson’s mission to in- crease the diversity of the U.S. The Ericsson-Girl Scouts Alliance workforce, and to close the strategic collaboration also gender gap in STEM careers. entailed the deployment of 1000 ft. of high-tech Ericsson The Girl Scouts are truly the ex- fiber throughout the 92-acre, perts in empowering girls, and state-of-the-art, $14 million STEM they rely on partners like Erics- Center of Excellence, located son that are the experts in STEM in Southwest Dallas, preparing to achieve their critical mission. the center for 5G, IOT, and By working with the Girl Scouts transformative Information and across every Ericsson North Communication Technology American site, employees can (ICT) educational experiences. make a difference that is both locally meaningful and nation- Tomorrow’s workforce starts ally effective. today. The Girl Scouts are the preeminent leadership organi- Specifically, this collaboration zation for girls in North Ameri- has resulted in the develop- ca; their evolving and exciting ment of a digital assistant for partnership with Ericsson aims to STEM volunteerism called Jump- move the needle and provide start. Jumpstart was created to a true Jumpstart to their Nation- help volunteers acquire con- al STEM Pledge to encourage fidence and competence in 2.5 million girls to pursue STEM leading girls through STEM edu- fields by 2025. cation experiences. Even in the

41 42 SOUTH NOVO NORDISK HOUSTON, TEXAS GLOBAL HQ: DENMARK

Urbanization is a global phe- conceptualized and developed nomenon with more than two- based on the research findings: thirds of the world’s population expected to reside in urban Faith & Diabetes, which trains settings by 2050. Simultaneously, health leaders from Houston’s diabetes prevalence rates are faith-based organizations to on the rise worldwide. provide a diabetes self-man- agement education program to In response, Novo Nordisk cre- members of their congregation. ated Cities Changing Diabetes, So far, 48 trainers representing a global program that operates 24 faith communities have taken as a public-private partnership the training, potentially reaching in close to two dozen cities more than 75,000 Houstonians. around the world to address the public health epidemic of Disaster Preparedness and Di- diabetes in urban settings. The abetes, which created a plan unique characteristics and in- to implement diabetes pop-up frastructure of Houston, Texas, clinics in Houston-area shelters in spurred Novo Nordisk Inc. to the event of a natural disaster. implement the Cities Changing Diabetes program there. The Houston Diabetes Resource Center, an extensive online re- Through a research partner- source for people with diabetes, ship with the University of Texas their caregivers, employers and School of Public Health, Cities health care providers. Changing Diabetes Houston IMPROVING conducted quantitative and Diabetes Peer Support, which qualitative research to better works to increase the number of understand the factors that exist virtual and in-person peer sup- in Houston that make residents port programs for people with vulnerable to developing Type- diabetes in the city. HEALTH IN 2 diabetes. The Employer Diabetes Preven- To foster community participa- tion Program, which works with tion and empower Houstonians, employers to increase their offer- Cities Changing Diabetes built ings of the diabetes prevention HOUSTON a strong core of engaged local program. So far, nine employers organizations. in Houston are participating in the Centers for Disease Control As a result, nearly 100 communi- and Prevention-funded pilot pro- ty stakeholders are actively en- gram to demonstrate the appli- gaged in “Action Work Groups” cation of the DPP for employees aimed at implementing five with prediabetes. unique projects that they

43 44 SOUTH SASOL CHEMICALS SOUTHWEST LOUISIANA GLOBAL HQ: SOUTH AFRICA

Sasol Chemicals (USA) LLC its community partners expand- created the Southwest Louisi- ed the program to provide ana Workforce Resource Guide financial assistance to cover and Scholarship program in tuition, transportation, childcare partnership with local workforce and other costs associated with development and education educational advancement. leaders to address Southwest Louisiana’s 20 percent unem- To date, Sasol has invested ployment rate and prepare for nearly $742,000 in the Work- a looming $117 billion industrial force Resource Guide, mentor economic boom. training services, career coun- seling and the Workforce Schol- To determine how best to ad- arship Program. dress the unemployment issue and enable local residents to Sasol also spearheaded the take advantage of the tremen- sustainability component of the dous economic opportunity to initiative, generating an ad- come, Sasol conducted formal ditional $200,390 in donations research and personally en- from other corporate sponsors. gaged local community stake- holders. The guide’s scholarship com- ponent has helped more than The workforce resource guide 170 recipients graduate from program that Sasol produced technical programs. In addition, includes a step-by-step guide more than 200 people have to choosing a career path, ac- participated in the Workforce quiring training, certifications Readiness Seminars, which pro- and basic life skills, preparing a vide information on various pro- READYING resume and ultimately securing fessionalism topics. a job in support of area indus- try. Sasol’s workforce resource guide and scholarship initiative Furthermore, the program con- has helped the Southwest Lou- AMERICA’S nects community members with isiana area attain one of the job training and social service lowest unemployment rates in resources, one-on-one men- the country. torship, career counseling and workforce readiness services. WORKFORCE Following the successful launch of the how-to guide, Sasol and

45 46 FIGURE 3 OFII MEMBERS OFII Members Are Leaders ARE LEADERS in Promoting Gender Diversity Higher score equals greater gender diversity

Global IN ETHICAL Average GOVERNANCE U.S. Companies

OFII member companies are global leaders in corporate governance. Developing Having succeeded in their home markets, they have grown opera- Countries tions in local communities across the United States.

They have also brought with them industry know-how and a tradition OECD Countries of stable corporate governance. While OFII members are on par with U.S. companies in terms of their overall corporate governance score, our analysis shows that they exceed the U.S. average in terms of gen- der diversity by 37 percent (see Figure 3). They also are global leaders OFII Member Companies in terms of anti-corruption and corporate stability. In short, they are productive, responsible companies providing high-quality jobs for U.S. workers. Source: OFII analysis of Morgan Stanley Capital International (MSCI) ESG Indexes, accessed Fall 2018.

Figure 3 shows how different groups of companies scored in the gender diversity metric—as well as the weighted global average for this metric. The above groups are defined as the following: • Global Average: The average score of all companies recorded that had a score (a non-missing value) for this metric. • U.S. Companies: The average score for all U.S.-based companies, of which there were 2,332. • Developing Countries: The average score for all companies based in developing countries, of which there were 1,140. • OECD Countries: The average score for all companies based in non-U.S. OECD countries, of which there were 3,117. • OFII Member Companies: The average score for all companies that are members of the Organization for International Investment, of which there were 164.

47 48 WEST HITACHI SOUTHERN CALIFORNIA IGNITING GLOBAL HQ: JAPAN

INNOVATIVE The Hitachi Teacher’s Choice Because of cutbacks in science newspaper-based program, in education in many U.S. schools, partnership with the Los Ange- many students are not able to les Times, acts as an education learn about robotics or partic- unit to provide Southern Califor- ipate in STEM-related activities THINKING nia students with the opportuni- until they are further along in ty to learn more about STEM. their education. Through the Teacher’s Choice By taking on this program, Hi- program, copies of the LA Times tachi has shown its concern are delivered to participating for U.S. communities and how classrooms every day, along we can create solutions to ev- with weekly curriculum guides eryday problems. Importantly, for teachers to utilize in STEM Hitachi’s poster contest allowed lessons. for students to come up with re- al-life solutions that would help As part of a classroom’s enroll- to change the world in which ment in the Teacher’s Choice they live in. program, Hitachi also sponsors a poster contest. In surveys taken after the pro- gram ended, many teachers In their most recent contest, said that it was a huge deal students were asked to design for the STEM students to reach a robot that would have a posi- outside of their comfort zone tive impact in their community. and communicate their ideas through art. This contest garnered the most entries in the history of the pro- Furthermore, this program has gram. In fact, more than 350 encouraged young students to students from over 100 southern consider careers in the scientific California area schools submit- and technical fields. ted posters, with many entries coming from schools that had never participated before.

49 50 • Opportunities in Clean Tech Score. Companies that pro- APPENDIX A actively invest in product and services addressing issues of resource conservation and climate change score higher on this key issue. Companies lacking strategies and invest- METHODOLOGY ments targeting these areas score lower on this key issue. The social metrics include: The Morgan Stanley Corporate Investment ESG Indicators (MSCI ESG) is one of the most commonly cited sources for reliable infor- • Health & Safety Score. Companies with comprehensive mation on corporate ESG activities. MSCI ESG conducts research H&S management and superior track record operating in and catalogues companies’ commitments to responsible practic- countries with lower level of industrial fatalities score high- es in the realm of environmental, social, and governance policies. er on this key issue, while companies with poor strategy Raw data are collected that capture the risk exposure, practices, and track record score lower. and performance of some 6,800 companies (2,333 U.S. compa- nies, 4,512 foreign companies) representing more than 80 different • Human Capital Development Score. Companies that pro- countries, from sources including government statistics, corporate actively manage human capital development through annual reports, proxy filings, securities filings, environmental data- offering competitive benefit packages, implementing bases, websites, media sources, and NGO publications. formalized training programs, and actively measuring employee satisfaction score highest on this key issue. The The database used to analyze ESG factors included over 150 companies that rely heavily on highly-skilled employees metrics. The metrics are derived from raw data that measure com- but show no evidence of such employee engagement panies’ exposure to ESG risks and their performance in mitigating score poorly on this key issue. those risks. Most of the metrics are presented on a scale of 0-10 (with 10 being the best) and are grouped into “environmental,” • Privacy & Data Security Score. Companies with compre- “social,” or “governance” policies. Each of those broad catego- hensive privacy policies and data security management ries is called a pillar, and each pillar is scored by weight averaging systems and companies that do not have business models the scores of the constituent elements. reliant on trafficking in personal data score well on this key issue. Companies offering few or no assurances regarding The environmental metrics include: the protection of personal data score lower, as do those with business models that rely on trafficking in personal • Carbon Emissions Score. Companies that proactively in- data without consent. vest in low-carbon technologies and increase the carbon efficiency of their facilities score higher on this key issue. The governance metrics include: Companies that allow legal compliance to determine product strategy, focus exclusively on activities to influ- • Corporate Governance Score. This key issue evaluates ence policy setting, or rely heavily on exploiting differenc- the extent to which companies’ corporate governance es in regulatory frameworks score lower. practices in specific governance areas – audit, board, compensation/remuneration, shareholder rights -- pose • Carbon Footprint Score. Companies that measure and financial risks to shareholders. reduce carbon emissions of their products throughout the value chain and implement programs with their suppliers • Anti-Corruption & Stability Score. Companies that have to reduce carbon footprint score higher on this key issue. programs, guidelines, and clear policies to avoid corrupt Companies that fail to identify or evaluate the carbon business dealings; have strong partnerships with local footprint of their products or that lack programs to reduce communities; and have high level of disclosure and trans- carbon emissions throughout the supply chain and distri- parency score higher on this key issue. Companies with a bution score lower on this key issue. history of community opposition, that face security prob- lems, and lack transparency in ESG and financial informa- • Biodiversity & Land Use Score. Companies that have pol- tion score lower on this key issue. icies and programs designed to protect biodiversity and address community concerns on land use, score well on • Gender Diversity. Does the board have at least one fe- this benchmark. Companies with operations that disturb male director? Those that do receive a 1. large and/or fragile, bio-diverse areas and lack strategies to minimize and mitigate biodiversity losses, score poorly. 51 52 APPENDIX B END NOTES

1 Cai, L and C. He (2014), “Corporate Environmental Responsibility and Equity Prices”, Journal of Business Ethics, 125: 617-635. 2 Attig et al. (2013), “Corporate Social Responsibility and Credit Ratings”, Journal of Business Ethics, 117: 679-694. 3 Flood, C. “Gender-diverse companies are more productive,” Financial Times, March 11, 2018. 4 Clark, G. et al. (2015), “From the Stockholder to the Stakeholder: how sustainability can drive financial outperformance”, March 2015. 5 Friede, G. and Busch, T. and Bassen, A. (2015), “ESG and financial performance: aggregated evidence from more than 2000 em- pirical studies”, Journal of Sustainable Finance & Investment, 5:4, 210-233, DOI: 10.1080/20430795.2015.1118917.

53 54 Copyright © 2019. All rights reserved.

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