At a moment of unprecedented attention, investment and opportunity for the emerging field of ESG, leaders are asking: Who is best preparing their organization for the society of the future? Who is innovating today to meet decades-long environmental and social goals? Who is setting standards that catalyze their industry’s change for the better? Who is defining what bold and aspirational look like — and how best to advance that work in practice?

Enter NationSwell’s ESG Next, an exemplary group of investors, executives, authors, philanthropists, social sector leaders, academics, and field builders who are helping to shape business as a force for social and environmental progress, advancing — and even pioneering — the most forward-thinking and effective programs, initiatives, technologies, methodologies, practices, and approaches.

For this installment, NationSwell interviewed Jenny Flores, Head of Small Business Growth Philanthropy at Wells Fargo, about how her experience as an immigrant in America informed her journey to human-centered banking, the unique impact of flexible capital, the importance of fearless philanthropy, and the not-so-secret powers of her approach to collaboration.

Greg Behrman, CEO + Founder, NationSwell: How did your personal and professional journey to the field of ESG begin?

Jenny Flores, Head of Small Business Growth Philanthropy, Wells Fargo: I’m an immigrant to this country; we moved to San Francisco from El Salvador when I was almost three years old. Coming to America was the promise of a better life. We were leaving a country that was war-torn and my parents knew that in America, dreams come true.

But my journey has been defined by questioning what that actually means in practice. There’s this sentiment that in America, you can do anything. But then there’s what it actually takes — that grit — to navigate an unfamiliar system and actually make something big happen.

For me, that means navigating the systems of this beautiful country alongside the people whom I ultimately want to help and serve. I went into banking wanting to learn to underwrite affordable housing because I knew housing was such an important goal for my community; having a home that is affordable and accessible is the number one priority for so many.

That’s what fuels my drive, and that’s what brought me to the industry. And in my time working within it, I’ve learned just how powerful the banking industry really is. It allows you to buy a home or go to college or start a business, so it’s at the core of enabling the American dream.  I made a very deliberate choice to stay in this industry and help influence it to better serve people like me, who have to work that much harder to become executives.

That’s the question at the core of my mission: How do I get banking to see the world through the eyes of people like me — people who may not have that natural runway?

Behrman, NationSwell: How do you make sense of this moment in ESG?

Flores, Wells Fargo: The momentum in ESG right now is going to make it extremely difficult to go backwards. The leaders of the future will need to balance profit and purpose in ways that in the past hadn’t been needed. This is no longer just about compliance — it’s about how leaders can show they’re ready to navigate the opportunities that are still nascent or evolving in a complex society.

We had a recent conversation at a town hall with our employees. We asked ourselves the question, “Are we willing to continue to double down on ESG in the face of opposition from some segments of the population?”

From my personal perspective and taking into account all of the data and the science, we need to take these factors seriously. Yes, we have our traditional oil and gas industries; and yes, they are filling a need. But we also need to transition to a way of doing things that will help a sustainable future to exist. We’re in the position to finance that, and to figure out how to scale that. And that is not something I personally think we should back down from. The banking industry is in a position to help figure out the solutions for our economy today but also for our future needs, and we’re going to do it. Our survival depends on it.

But put aside the politics and just think about it from the reality of the moment, and from the business opportunity. Any company would be foolish not to understand there is a real commercial opportunity present. ESG professionals have the ability to really influence how our understanding of this moment evolves in authentic ways that map into the business priorities that we foresee for our prospective industries: How we bring our employee expertise, how we elevate it, how we connect the dots between our business impact and our impact in the world around the issues we choose to stand by.

Behrman, NationSwell: Can you talk about some of the unique programs or initiatives that you think other ESG practitioners should know about?

Flores. Wells Fargo: Before I embark on a new initiative at any of the companies where I’ve had the privilege of working, I find that there’s this moment when I can center solutions on building equity in the system, and help executives with decision-making power to see a new or different path forward.

Speaking truth to that power is very important. About 60 days after I started at Wells Fargo, Covid came to America. I had to make a choice about how I wanted to frame the work, and I wanted to make sure that we had a shared understanding, without mincing words — not leaving anything up to assumption.

And what I said was, “The financial system as it currently exists does not serve people of color or people from diverse backgrounds well. Period.” I laid out all the reasons I’d seen in my 20-year career in banking that have made that happen, and I told my organization that though I haven’t been at Wells Fargo for very long, I would imagine that some of these reasons play out here, too. And if that’s the case, I reasoned that our response had to be very different than what we would traditionally do — because the urgent need here will grow exponentially, and it’ll grow very quickly.

Within 30 days, businesses were shutting down. The majority of those 41% were Black businesses, 36% Latino Hispanic businesses. It was very clear who was most negatively impacted.

Because of the conversations we started around driving impact for the most vulnerable and under-served , our CEO made a courageous decision: That we were going to give away all of our processing fees from participating in the first round of the Paycheck Protection Program, not even knowing what the final sum total would be.

And that’s how the Open For Business Fund started — with intention built in, and with the understanding that we should build in flexibility where, in the past, we would avoid taking quick, bold action because it was perceived as too risky. Now, we could move forward with our assumptions based in the realities of the communities we served. That’s how we designed it, and it’s been a pride point for the company ever since.

Through our roughly $420 million Open for Business Fund, we’ve reached over 178,000 businesses. 73% of those business owners are low-to-moderate income, 79% are racially or ethnically diverse, over 53% are women business owners. And you could just see the impact happening in those populations that we really sought to reach.

Behrman, NationSwell: What was the impact of those investments?

Flores. Wells Fargo: Of that money, the first $250 million was deployed as very flexible capital, which took a lot of different forms: In one example we made a grant so that the nonprofits we supported could make grants directly to small businesses; In another instance, the investment could have helped a community lender bring down the interest rate for a small business owner’s existing loan; it took a myriad of forms. Impact will be tracked through early 2025, but as of September 2022 organizations funded through the program have raised $1.7 billion dollars in grants and debt to support communities across the country — so essentially we’ve generated six times the initial investment — just based on being flexible and responsive.

The Wells Fargo dollars were catalytic because we were really fast to get into the community. The money went out as grants to nonprofits, as equity on the balance sheets of nonprofits so they could lever that money up. We focused on strengthening the balance sheet of our non-profit grantees so they were able to then absorb additional capital that they raised so that they wouldn’t be in a risky situation themselves. We also utilized loan loss reserves so that if any of those loans went sideways, they could have that on their balance sheet to protect them.

The design was really purposeful and intentional. It helped create and amplify impact. We did a lot of little things that were meaningful to support the strategies and successes of small businesses across the country.

Behrman, NationSwell: What are some other examples of unique initiatives you’re helping to lead at Wells Fargo that are yielding tangible impact?

Flores, Wells Fargo: We’re also lifting up some incredible ideas that I think have the potential to change how small businesses raise money. For example, we are funding the Small Business Exchange, or SMBX, which is a FINRA-registered funding portal and public marketplace for issuing and buying U.S. small business bonds.  The SMBX team has figured out how to help small businesses be able to issue bonds so they can raise capital. And in Washington D.C., we are testing this with the mayor, providing technical assistance to small businesses who can then go on to raise $400,000 or $500,000 as part of a bond offer.

Very often, this support will go to the ideas and leaders that have so many naysayers who challenge them and say, “How are you going to do that? It’s never going to happen.” Those are the people I love to get behind. The future holds so much promise for resilient leaders like them, but we have to think differently about how we assess risk and finance innovation.

The SMBX is just a completely different way of financing businesses, and it has the power to really engage the community. So if I want to invest, get a financial return and drive social impact, I know where to go. The due diligence is completed, and I can invest in businesses in my neighborhood that are going to create jobs and build the economic base of my city.

Behrman, NationSwell: What is it about your approach to this work that has helped you to be an effective leader?

Flores, Wells Fargo: Once something gets approved, I love going full speed on it, and I love helping others reach that velocity — even if it means sitting back and letting them take the wheel. It brings me a lot of joy to see the people around me actively in pursuit of impact, and I like to empower them to take a piece of the initiative and really lead it internally, creating visibility around it. I’m not driven by getting the credit — and not being credit-driven helps bring people to the table with me because they feel like they can collaborate more authentically and freely, and it also empowers them to step up, become advocates and changemakers, and make things happen.

Getting the credit or getting acknowledged isn’t nearly as important as getting someone else in an organization to care about the problem that you’re working on, and getting them moving to work on it in their own way. That’s how change happens in organizations. It’s not one person. It is kind of a movement that happens and then you have people everywhere marching towards a bigger goal. It makes companies better. It makes the culture come to life in a different way. I can’t begin to tell you how happy that makes me.

Basically, my secret power is that I’m a huge collaborator, and I try to do so courageously. I’ll be the first to step up and try to sell something internally, and I might get kicked in the face, but it’s okay.

Behrman, NationSwell: Who are some leaders that inspire your leadership?

Flores, Wells Fargo: My dear friend Lorena Hernandez who previously headed up community impact for Comcast in California. She’s an incredible leader, and a true champion at understanding how to ingrain ESG into the core of your business. I admire the fact that she’s always collaborating with community, and doesn’t just design from her corporate office – she’s always really out there, learning and giving back.

Another person whose wisdom I often seek is Tracy Gray, who is the Founder and Managing Partner at a venture firm called The 22Fund.  Tracy is recognized widely as a multifaceted leader in social and economic equity in finance.  She is brilliant (she is also a rocket scientist) and I have her on speed dial because she is able to break down business models like no one else. I love that Tracy can see the world for what it is and also for the potential we all have to do and be better.  . She’s always thinking about what the present needs of communities are to date, and thinking ahead to how those needs will evolve in the future. I just love talking to her because I feel like she grounds me in the short term, and then inspires me for long-term thinking.

Last but not least is Jacqueline Martinez Garcel over at the Latino Community Foundation. She’s incredible. She’s such a heart-centered leader. Anytime I have the opportunity to be near her, I feel like I leave just spiritually in a different place because she is so grounded in the work, and in how people are feeling.

Behrman, NationSwell: What are some resources that inspire your leadership?

Flores, Wells Fargo: I get inspired by people who are on their A Game, it doesn’t matter what industry they’re in. But I would say I am a big Beyoncé fan. She is heart, mind, soul, everything’s aligned to give you this experience where you feel like, when she’s performing in front of you, she’s singing just to you. Everyone leaves her concerts feeling that way. I’m inspired by how ferocious she is. I want to be that ferocious at impact. I want to be the Beyoncé of social impact.

To learn more about how our ESG Next honorees are shaping business as a force for social and environmental good, visit the series hub. Wells Fargo is a NationSwell Institutional Member. To learn more about membership in NationSwell’s community of leading social impact and sustainability practitioners, visit our site.

At a moment of unprecedented attention, investment, and opportunity for the emerging field of ESG, leaders are asking: Who is best preparing their organization for the society of the future? Who is innovating today to meet decades-long environmental and social goals? Who is setting standards that catalyze their industry’s change for the better? Who is defining what bold and aspirational work looks like — and how best to advance that work in practice?

Enter NationSwell’s ESG Next, an exemplary group of social impact and sustainability leaders who are shaping business as a force for social and environmental progress, advancing — and even pioneering — the most forward-thinking and effective programs, initiatives, technologies, methodologies, practices, and approaches.

For this installment, Greg Behrman, CEO + Founder of NationSwell, sat down with Pete Stavros, co-head of Global Private Equity at KKR , to talk about his journey to the field of ESG, the leaders and books that inspire him, and why the movement for broad worker ownership is good for just about everyone — even if its myriad of implementational challenges can be daunting.

Greg Behrman, CEO + Founder, NationSwell: Tell us about your personal and professional journey.

Peter Stavros, Co-Head of Global Private Equity, KKR: My dad operated a road grader for a small construction company in Chicago for about 45 years, and I saw firsthand what it was like to earn an hourly wage. My dad liked his job. If you were to talk with him, he’d never begrudge being a construction worker. But there are two things about it he didn’t like: First, the inability to build wealth on an hourly wage of 15 bucks an hour; and second, the lack of alignment of incentives. 

There were so many moments in my childhood that really centered on the hourly wage and the lack of incentive alignment, like a big fight my dad’s union had with the company over whether workers would get paid for the drive to and from the job site, whether they get paid for the lunch hour. And my dad would say, “Isn’t this crazy? It’s not about how much we get done, or the quality of what we do. It’s all about the hours.”

My dad always really dreamt of profit sharing, or worker ownership, or some way for his union to be aligned with the company. Neither of my folks went to college, so I didn’t have much of an embedded career path. I happened to find myself at an investment bank right after I graduated, and then I got recruited away to be an investor. The first thing they had me work on was an Employee Stock Ownership Plan (ESOP), a fascinating experiment from 1974 wherein Congress tried to provide tax incentives for broad worker ownership. 

It was almost like the universe was saying, “You should learn about employee ownership.” And so when I went to business school, every spare chance I worked ownership into the curriculum that I was studying.

Behrman, NationSwell: Can you tell us about Ownership Works, the nonprofit you founded?

Stavros, KKR: Ownership Works is a nonprofit organization that partners with companies and investors to provide all employees with the opportunity to build wealth at work. If worker ownership is done well, it’s good for all stakeholders. We’ve seen broad-based employee ownership create meaningful wealth-building opportunities for employees, uplift families, reinvigorate corporate cultures, and improve business performance. 

From everything I’ve seen in all the work I’ve done on this — and I’ve been working on this since I was in business school — if it’s done well, it’s good for all stakeholders. Now the challenge is that it’s hard to do: it takes a ton of time and effort. That’s really a lot of what Ownership Works is trying to unravel: How can we help companies do this more efficiently and more effectively?

So, to start, let’s say your goal is to extend ownership to Ingersoll Rand’s 16,000 workers in 80 countries — how do you actually do that? How do you administer a huge plan like that mechanically, structurally, and from a tax regulatory compliance legal perspective? And then, importantly, how do you get people to understand and value it across all these different jurisdictions, facilities, languages, time zones — and then how do you use it to build culture? 

You have to start from a place where you acknowledge that there’s low trust. Look at the data: 70% of Americans don’t like their jobs. 15% to 20%, depending on the company, actually hate their jobs. They’re literally throwing wrenches in the machines trying to hurt their employer. And then you look at the Treasury Department saying two-thirds of Americans are not financially competent. So this isn’t just a lower income person’s problem, it’s an epidemic in the country.

As we grapple with these challenges, we’re also trying to do enough storytelling that we build a broader movement around this to build trust and buy-in. Now that Ingersoll Rand’s 16,000 workers across 80 countries have all become owners, the hourly workers have earned well over a half a billion of wealth for themselves. This took nine and a half years, but the quit rate went from over 20% per year to about two and a half percent — so we went from one in five walking out the door to one in 50. And the engagement scores went from the 19th percentile to the 91st. 

When you see something like that, you have to ask yourself, “Who could that not be good for?” Workers aren’t quitting because they’re happier. Companies have a more stable workforce. The company doesn’t have to hire 3,000 new people every year, which means less recruiting costs, less training costs, and smaller losses in productivity and knowledge since every year, the thousands of people who would be walking out of the door are staying put.

From an investor perspective, that was one of the better deals we’ve done — it was a multi, multi-billion dollar gain for our investors. It’s been great in the public markets. The stock at one point had tripled, and it’s still more than doubled despite a bad market. 

We’ve been working on Ownership Works internally for about 12 years. We’re currently working with over 60 partners to expand shared ownership, including banks like Goldman Sachs, Morgan Stanley; investors like KKR, TPG, Warburg Pincus and Leonard Green; labor leaders like Wilma Liebman, President Obama’s head of the National Labor Relations Board; nonprofit leaders like Ford Foundation and Rockefeller Foundation; and some of the biggest pension funds in the country.

By the end of Q1 2023, I imagine we’ll have close to 100 organizations around the table trying to make a real step forward in how ownership and upside is shared and how that’s used to build stronger cultures. 

My estimate is the top 20 private equity firms, if they were all to do this, you’d be talking about 5 million people impacted. The potential for scale impact is massive. 

Behrman, NationSwell: How would you define this present moment in ESG? Where do we find ourselves, and where is the field going?

Stavros, KKR: It’s become politicized, and I’m concerned. But I try to approach some of the factors that I’m most passionate about as good business. If you take employee ownership, it’s hard to make an argument against it. It’s good for workers, good for corporate cultures, good for communities, and good for investors. But I think if you come at some of it from my perspective, where I frame it as good business, then it would be a shame if people aren’t also looking at this as a risk mitigation tool, a culture enhancer.

Behrman, NationSwell: Who are some leaders in the space whose work inspires you?

Stavros, KKR: I would mention Vicente Reynal at Ingersoll Rand, Kathy Bolhous of Charter Next Generation, Dave Bangert at C.H.I. Overhead Doors, and Bert Bean at Insight Global.

Behrman, NationSwell: Can you tell us about some books that have informed your approach to leadership?

Stavros, KKR: “The End of Loyalty” by Rick Wartzman is a great book, and it basically chronicles what happened in the labor market: how we went from where we were 50 years ago — when workers had a defined benefit pension, gold-plated healthcare, and a myriad of worker benefits that basically amounted to lifetime employment — to where workers are now, where they’re on their own for retirement, health care, and job security. 

Alongside the Wartzman book, I’d also raise up “The Great Risk Shift” by Jacob S. Hacker, and “The Fissured Workplace” by David Weil as great, related books on what’s happened to the economy that’s made it so hard on working class folks.

To learn more about how our ESG Next honorees are shaping business as a force for social and environmental good, visit the series hub. KKR is a NationSwell Institutional Member. To learn more about membership in NationSwell’s community of leading social impact and sustainability practitioners, visit our site.

This story has been updated to reflect Pete Stavros’ recent promotion.