Pseudo936's Profile

Lot’s of interesting points raised above. It seems like the bulk of the disagreement comes down to differing views on what responsibility companies have to better society versus to make money for shareholders. My thought on the subject is that, while it would be great if we could expect companies to care about their communities, broadly, it’s a much safer bet to expect them to try to create value for shareholders (while staying true to the legal bounds they operate within). Realistically, for better or (more likely) worse, it’s what they were created to do, and how they’re structured in the current system.

With that said, I don’t think that means we need to just throw up our hands and assume that we can’t influence companies to do things that benefit society. I’d argue that, if customer attitudes were changing – e.g. to the point that Walmart’s customers were willing to pay more for goods that they knew were manufactured under fair conditions or within the U.S. by U.S. workers (a future that’s not impossible, but which seems very far from the current world) – it’s conceivable that companies could be motivated to “do the right thing” not only for the warm and fuzzy feeling they’d get for doing so, but also for financial reasons that they could show to their shareholders. But in the meantime, I think it’s a stretch to try to convince management teams to make uncompetitive choices, or their shareholders to accept lower returns – at least until we get to a point where markets (or governments!!) reward firms for doing good.

Very interesting article, OSB!

I think that at this point it’s extremely hard to say what will be required of UK bankers as part of the pending Brexit. This is particularly the case given the massive tensions and unaligned incentives between other European centers (Frankfurt, Paris, Dublin, etc.) that are vying to be the chosen ones of the EU financial capital lottery. Since such a designation would be a massive boon to any city from a fiscal and prominence perspective, all are incentivized to make concessions that allow them to come out as the winner.

It could be argued that Goldman and its peers should expect a “hard” Brexit, and lobby based on that expectation; however, I would contend that they could potentially arrive at a less punitive outcome if they were to choose a city, and work with it to jointly petition the European Banking Authority (EBA) to allow for a less disruptive outcome. While such a lobbying effort likely would not carry much weight if done on their own, it could have a substantial impact if the industry worked with a city and together pitched the regulators for exceptions to existing passporting rules. With that said, doing so would require not only a joint effort between banks, but also an agreement with a new host city – easier said than done given the number of individuals involved!

While it’s easy to suggest that we should romaine calm in the face of the challenges being faced, in the food cultivation space, climate change poses a truly existential threat. Admittedly, as noted in the above article (great topic!), Tesco has taken large steps to confront and tone down its own environmental impact; however, I believe that markets overall can be too generous when giving credit to the company given that its changes have largely effected the environmental impact of the company specifically as opposed to that of its supply chain.

In most cases I would pear-ish the thought that we could hold the company to a standard that suggests a broader societal responsibility, but in the case of such a ubiquitous, influential company as Tesco, I believe that they have a legitimate opportunity to shape the social discussion by making changes to the produce they offer such that it becomes less environmentally onerous.

It would be simple to lettuce tell ourselves a story that justifies why continued consumption of outdoor grown, off-season produce is the norm and to continue to purchase as if it was. But, at risk of sounding a bit corny, if we want to change preference and behaviours, it’s time to turnip the scrutiny on consumer expectations. Doing so would be challenging, and there would certainly not be mushroom for error, but Tesco is uniquely positioned to do this in a way that could actually be sustainable given their massive footprint and scale with suppliers. As such, I believe it’s worth corn-sideration.

Really interesting write-up on a really interesting topic!

Twitter faces a bit of a peculiar situation here: its “supply chain” of posts and news is created and curated by the company’s users, and the sites network effect creates the company’s “product” (the posts that appear on users’ feeds), and through this, the company’s value. But at the same time, the most existential threat that Twitter faces is driven by an over abundance of this same “supply”! This seems absolutely bizarre. With that said, when taking a step back and just thinking of the tweets as a product in a more traditional way (e.g. as a crate of blue wine vs. as a bit of data), it actually makes sense – similar to other companies, Twitter must to take steps to ensure an unspoiled supply chain.

As noted in the above comments, tackling this issue will not be a small feat. It will be incredibly challenging both in terms of the technology and human judgement that will be required. However, given the critical nature of the problem, and its potentially all-reaching impact on Twitter’s “supply”, it’s one that the company can’t reasonably ignore.

I find Danone Russia an interesting case study (… sorry everyone, couldn’t resist) in examining when a company should use digitization, or another complex process change, in their supply chain. In more developed markets and with larger companies, it can be easy to see how digitization can help virtually any entity in some way or another. But how should we think about less developed companies where there may be other low hanging fruit that’s easier to execute on?

My initial thought is that even in those less-developed cases (which seem to be aligned with Danone Russia), we should not ignore digitization initiatives in the name of pursuing other opportunities given the wide benefits that digitization can create. With that said, if the company is actually going to pursue digital initiatives, I feel that they should do so with gusto vs. in the halfhearted way that Danone Russia seems to be doing (e.g., having a dedicated social media initiative that has only resulted in 1662 followers on Facebook and 48 on Instagram implies it was not being taken particularly seriously by the company).

Danone Russia has an opportunity to use digital initiatives to massively improve not only the efficiency of its supply chain, but to also dramatically improve its ability to forecast demand (which currently seems to be a material struggle). If they can do this effectively (and assuming at least a bit of luck in terms of changes to the current geopolitical situation), I believe they have the opportunity to create a self sustaining enterprise that can create value for the company.

Really interesting write-up!

JIT’s correct to note that Pinnacle has already made material (and frankly, quite impressive) strides in improving their sustainability processes since setting their reduction targets in 2012. With that said, I would not be quite so quick to jump to saying that the company had therefore set unambitious goals initially (e.g., I imagine that reducing energy consumption by a third was no small feet for such a large company). Instead, I’d suggest that their success gives them an opportunity to set new goals across the first four categories of electrical, nat gas, and water usage, and ghg emissions.

My primary reason for recommending moving the goal posts would be to take strides to guard against the complacency that Justin flagged as a risk. While it can be easy for a company to pat itself on the back for making solid progress, I see this as a case where continuous improvements can and must be made if Pinnacle wants to remain on as the dominant player – in particular under the backdrop of the imminent threats faced by the industry that Mel noted. By doing so, Pinnacle has the opportunity to simultaneously increase their value (by reducing costs) while also throwing around their weight as the industry leader in a way that could (hopefully) convince their peers to take similar steps. Such a move could also serve to reinvigorate the team to think more transformational vs. incremental when looking for ways to drive further improvements.