Famed investor Paul Tudor Jones (Trades, Portfolio) believes that we’re headed for trouble if we don’t shrink the wealth gap. His solution? Pressure companies to be more just.
On the tony Belle Haven peninsula in Greenwich, Conn., overlooking Long Island Sound, sits a massive neoclassical house that looks as if it could have been transplanted from the University of Virginia campus, the alma mater of the property’s owner: hedge fund billionaire Paul Tudor Jones (Trades, Portfolio) II. A mansion on Greenwich’s gold coast might not be the most obvious place to go looking for solutions to America’s growing wealth gap. Yet it was there two years ago that Jones began hatching a plan to shrink the widening chasm between rich and poor.
Jones, 60, who has an estimated net worth of $4.5 billion, was having coffee one day with Deepak Chopra, the holistic medicine advocate and bestselling author, who knows the Wall Street titan through Jones’ wife, Sonia, an Australian by birth who runs a yoga and wellness business. Chopra had grown deeply concerned about income inequality. “I had been going to Occupy Wall Street meetings and saw the rage but didn’t see the solutions,” he says.
During a spirited discussion with Jones about America’s disappearing middle class, Chopra, who teaches a course at Columbia Business School called Just Capital & Cause-Driven Marketing, brought up an idea one of his students had suggested in class: create a stock market index that would drive capital to companies that treated their employees and communities well. The concept of a market-driven approach appealed to Jones, the onetime cotton trader who founded Tudor Investment Corp. in 1980, became famous by predicting the crash of ’87, and today manages $13.8 billion. “I thought, 'Wouldn’t this be a great thing to do?'” says Jones.
Jones did some quick research — and was both surprised and more than a little embarrassed to discover that taking a values-based approach to the stock market was hardly an original thought. So-called socially responsible investing, he soon learned, was a $6.6 trillion industry that had existed for decades. And yet it had never popped up on the radar of the hedge fund titan — or, Jones concluded, succeeded in putting much pressure on Fortune 500Â companies to share more of their wealth with workers. That, he quips, is “a sad commentary both on the space and the space between my ears.”
Then Jones had a different idea: competition. Why not rank America’s top 1,000 companies based not on what Wall Street values —profits — but rather on what Main Street wants? If the list caught on, he reasoned, companies might someday vie to be ranked higher than their rivals. And to do so they would have to pay workers more fairly, make products more sustainably, and give more back to the community.
To put his plan into action, Jones earlier this year created a nonprofit called Just Capital—inspired by the title of Chopra’s Columbia course. The mission is to research what makes people like or dislike corporations and then to create an annual list — which will debut in the fall of 2016—tentatively called the Just 1000. “We want to give the American public a voice where it’s never had a voice,” says Jones. “It’s going to be crystal clear and unbiased and without prejudice. And it’s going to drive corporate behavior.”
Skeptics might wonder what kind of difference a simple list can make. But Jones believes that harnessing public opinion can prove powerful — and that changing the behavior of big companies could have a cascading effect. “When we talk about moving the needle on corporate America, we’re talking about a scale that’s unrivaled anywhere else on the globe,” he says.
continue reading: http://fortune.com/2015/08/20/paul-tudor-jones-income-inequality/
