Rethinking the Purpose of Business
Retired Salesforce executive and Leavey grad Joe Allanson on why a focus on ESG makes sense – both for social impact and for business success.
In the last few years of his career, Joe Allanson lived by ambitious words: “Accountants are going to save the planet.”
That sentence was equal parts job description, guiding philosophy and elevator pitch for Allanson’s work as EVP of finance, ESG for Salesforce. Throughout his 20-plus years at the company before retiring in 2024, he viewed his world of accounting and finance as much deeper than bookkeeping — much in the same way he sees others rethinking the very purpose of business.
“It’s a conversation that's been happening at Leavey and other business schools around the nation in the past several years, and at businesses,” he says. “It’s the question, ‘What is the purpose of a corporation?’”
The way Salesforce answers that question made the company an ideal fit for Allanson, a 1985 graduate of the Leavey School of Business and the 2024 Alumnus of the Year Award winner at the school’s Accounting Awards Banquet.
“Of course the company was founded with the notion that certainly shareholders and investors are important, but so too is our community, our employees, our partners, the planet,” he says. “Business is the greatest platform for change, and the power of a company is far greater in what it can do than an individual.”
A New Framework
ESG is the latest framework for such a philosophy, following broader movements such as corporate social responsibility in earlier decades. Short for environmental, social and governance, ESG essentially is a set of investment principles focused on environmental and social issues and corporate governance. Interest in ESG has been driven largely by socially-minded investors in recent years.
More and more of Salesforce’s “tier one” customers have been asking him about ESG, Allanson says. In turn, he would share learning from the company’s ESG reporting — integrated into its annual report — plus its longstanding “1-1-1” model. Under the 1-1-1 model, the company dedicates 1 percent of its equity, products and employee time to community and charitable activities.
“This model has now been replicated by about 20,000 companies,” Allanson says. To him, the value of the model is that its impact scales as a company grows. For example, Salesforce had just under 400 employees when he joined. Now it has more than 73,0000. The 1 percent policy stayed the same, but growth led to a massive increase in employee time dedicated to their communities.
Allanson’s own community work has focused on education. He serves on the advisory boards of Leavey’s accounting program, as well as those at the University of Southern California and the USC Marshall School of Business. He also is a member of the board of trustees for the University of San Francisco, a fellow Jesuit institution.
When his work took him to the Salesforce offices around the globe, he always added an item to the travel agenda: meeting the top local volunteers. He wanted to know what community causes most engaged fellow employees. “We got the opportunity to learn about nonprofits that our employees were so invested in, and I got exposed to more organizations than I can count.”
Still, Allanson knows that many companies view ESG as a potential challenge. Addressing environmental impact in particular can seem a more daunting prospect.
“I try to provide them a nonbiased point of view,” he says. “I really try to provide a point of view from the lens of a business executive. This is good for business. I want to get closer to my customers. I want to get closer to my investors. They’re interested in this. And climate action, for example, represents the world’s largest transformation, with major opportunities for wealth and job creation.”
The Need for Standards
Allanson also acknowledges the challenges facing ESG practitioners and investors. One is the lack of uniform reporting standards — or reporting at all in some cases. Salesforce and many other companies include ESG-related data, covering everything from environmental impact to community volunteerism and contributions, in their annual reports. But that’s not true universally.
Even when there is reporting, “the results are not always comparable,” Allanson says, “whether it's across industries or across companies in the same industry. The information is not consistently prepared from year to year. It’s not always timely. The social responsibility reporting often comes out several months after a company's fiscal year end, and the information is not reliable.”
Allanson sees rapid efforts to close these gaps and notes that ESG is a young field and framework. In contrast, financial data is fairly uniform across reports because finance and accounting are long-established fields with agreed-upon standards.
“Whether it's investors or policymakers or customers or anyone, they're expecting the same kind of high-grade investor-quality information that we typically find with financial accounting and reporting,” Allanson says. “It’s going to take some time to sort this out.”
Perception and politics present another challenge. Depending where one is in the country or in the political sphere, ESG may be a dirty word. When travelling in certain parts of the country, Allanson would even leave the “ESG” out of his job title when he introduced himself, to avoid animosity.
The key is to take the long view of such work, he says. “You have to set policies internally that can withstand change. We're building companies to last for decades, not for the just into the next political cycle. So I start off with that point of view. At the end of the day, this is going to be driven by investors, who continue to demand information like this.”