Beaverton, Oregon-based and socially active Nike tells us to “Just Do It.” The Just Capital Foundation in New York is telling Amazon to do it “Justly” when it comes to selecting the city for its new mammoth second corporate headquarters, dubbed HQ2.
For years, our firm has been saying that corporate site selection is both a science and an art. The “science” deals with the numbers, the quantitative analysis of operating costs, taxes, regulations, incentives and other geographically-variable factors that we can attach a dollar sign to.
The “art” of site selection relates to those more social, qualitative factors that vary by city to city. These include factors like housing, education and cultural and recreational amenities that impact a company’s ability to retain key people and to be in a strong recruiting position to attract the best and brightest talent from both local and national labor markets.
That said, we are hearing of a new site selection variable on the qualitative side of the equation that relates to the social impact of a relocation and how that relocation affects a company’s brand or “social standing.”
We expect Amazon, currently facing backlash over its aggressive posture on incentives and the Bernie Sanders narrative about low pay and food stamps — to be especially conscious of social impact — and not afraid to use social impact as a way to mitigate criticisms about incentives, worker pay or even impending clouds of antitrust behavior.
On the premise that large corporations greatly impact the local social, economic and environmental conditions in the areas where they operate and that the public is watchful and concerned about these matters, Just Capital has analyzed nearly
900 of the nation’s largest publicly-traded companies to determine which have the best and most “just” business practices.
Key metrics included producing quality goods, treating customers well, minimizing environmental impact, supporting the communities businesses operate in, committing to ethical (and diverse) leadership, and above all, treating workers well. In the latest survey, Amazon ranked as the 55th most just company out of 875 surveyed companies.
In linking these enhanced just business behavior factors to the mammoth
Amazon HQ2 project (50,000 jobs, 8 million sq. ft. of Class-A office space), the New York-based Just Capital Foundation found that HQ2 has the potential to catapult Amazon’s just company ranking from 55 all the way to 9.
Our experience suggests that Just Capital just might be on to something, especially among high profile, high tech and consumer-oriented firms like an Amazon or a Microsoft or a Google. We have seen social good policies relating to the environment, in particular, directing site selection decisions for their power hungry data centers to cities with green power — hydro or wind — like Quincy in Washington State’s Columbia River Valley and Des Moines and Council Bluffs in Iowa, where green and sustainable wind power is readily available.
By the same token, we have seen anti-business social legislation like North Carolina’s controversial Bathroom Bill and Indiana’s Religious Freedom Bill affecting corporate site selection decisions dramatically. Numerous companies have cancelled or postponed relocations and expansions in these states, citing these two controversial and divisive bills — now both repealed.
Of the 20 finalist cities for Amazon HQ2, where could Amazon reap the greatest social benefit? Based on the demographics below developed by The Boyd Co.’s BizCosts® forecasting unit, Newark, New Jersey, would best serve that role. With the highest unemployment and poverty rates, the second lowest median income and largest concentrations of people of color of all the 20 finalist cities still competing for HQ2, a thumbs up for Newark would clearly give Amazon a huge social standing boost, not to mention the transformative impact on New Jersey’s largest urban center.
A Newark HQ2 decision driven in part by social impact considerations would also be in sync with Jeff Bezos’ plans to donate about 1.2 percent of his current wealth to address family homelessness and early childhood education. What better laboratory than Newark to help shape and influence how the largesse of the world’s richest man will be distributed through the new Bezos Day One Fund announced earlier this month with Bezos’ initial $2 billion contribution.
Another winner here, besides Newark, just might be Amazon’s already giddy shareholders as an improved Just Capital ranking has been shown to enhance a company’s standing on Wall Street. According to the latest Responsible
Investment Association Trend Report, 75% of professional investors consider a company's position on social and governance issues before deciding whether to invest.
