Katrina Scotto di Carlo - Serving People and Profit at the Local Level





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Feb 05, 2018
by Oscar Tollast
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Katrina Scotto di Carlo - Serving People and Profit at the Local Level

Placemaker co-founder discusses keeping money local and Portland's decision to divest of all corporate securities  Scotto di Carlo at the third session of the Salzburg Global Forum on Corporate Governance – The Courageous Director: Can Corporations Better Serve People, Planet, and Profit?

During the third session of the Salzburg Global Forum on Corporate Governance – The Courageous Director: Can Corporations Better Serve People, Planet, and Profit? – participants were asked to consider what attributes make a director “courageous.” Katrina Scotto di Carlo, co-founder of Placemaker, a tech platform for independent businesses, says she finds this question “surprisingly difficult” to answer.

Fittingly, Scotto di Carlo considered this question, and others posed to her while sitting in Max Reinhardt’s former office at Schloss Leopoldskron. Reinhardt was a director of a different kind, but one who achieved widespread recognition as a major theater figure of the 20th Century. Scotto di Carlo says the director, in a boardroom sense, also has to help hold many of the pieces together – not of a play, but of a business.

“I really think we’re stepping into some uncertain times and some major instability globally. It’s a time when people will have to stand up from all sectors and be courageous,” she says.

“I do believe corporations have a really important role to play, and the question is whether they’ll play that role.”

Scotto di Carlo, who considered herself somewhat of an outsider at the session, says, “I find that my role in nearly every business meeting is the same here as it is everywhere else, which I didn’t expect. That role is often to be the really weird thinker. I think that the way I come at problems is just really different. As a kid, I would get penalized for it because a lot of teachers thought I was joking. Nowadays, it is seen as helpful, but my mind is somewhat overly creative. In a business setting, it poses interesting questions.”

Beyond defining what it means to be “courageous,” participants at the third session of the Salzburg Global Forum on Corporate Governance also explored the second half of the session title: “Can Corporations Better Serve People, Planet and Profit?” Much of the focus of the three-day discussion was on the multinational/planet level. But for Scotto di Carlo, this question is just as important at the local/community level.

Scotto di Carlo played an instrumental role in her local community in Portland, Oregon, USA, as a member of the City of Portland’s Socially Responsible Investments Committee. The efforts by her and others led to Portland City Council divesting from all corporate securities in April 2017.

Looking back at why this decision was made, she says: “The city looked at just like the huge commotion that was coming out of this and they said, ‘You know what? This isn’t why we were elected. We were elected to deal with the homeless population. We were elected to deal with the housing situation. We weren’t elected to spend hours and hours and hours on this investment piece, so we’re just going to divest.’”

Each year, the council will review the investment policy and decide whether it should be changed. Scotto di Carlo says, “The biggest fear I have is that that’s not the solution to divesting. That means we only have US Treasuries to invest in, which with Trump is like an unknown. The solution would be that we look at a municipal bank like the Bank of North Dakota or something like this... The City of Portland is not putting anywhere near the amount of resources needed to create that solution currently. When April comes, it’s going to be: we killed this vehicle, we didn’t build another one.”

Scotto di Carlo believes one of the problems with municipal governments is what they choose to measure as investment. She adds: “To me, a really interesting challenge would be how we measure the overall investment and using investment in the broadest definition possible to understand what it means to invest in community, what municipal government’s role is, and then how that investment compares to Wall Street.”

WATCH: Placemaker co-founder Katrina Scotto di Carlo explains the City of Portland Council's decision to divest of all corporate securities

The Socially Responsible Investment Committee featured six members representing different domains. Scotto di Carlo was selected to capitalize on her expertise of independent businesses. Placemaker, which was established by Scotto di Carlo and her husband in Michael in 2010, was design to help support independent businesses in Portland. Scotto di Carlo describes it as a “loyalty program to the community, not just an individual business.”

Users of the platform can earn and spend points anywhere in their town. Information is stored on their Placemaker card or mobile app. Scotto di Carlo says, “It makes it so that the experience of shopping and eating local is one experience that you share in the community rather than you just going to separate businesses. You feel like you’re going into a solid community where every business is working together.”

The platform was launched as an experiment. Di Carlo concedes she didn’t realize how much work it would be, but other communities have since come on board with networks popping up in Victoria, BC, Canada, and Western Massachusetts and Monadnock, NH, USA. Placemaker seeks community partners such as business associations, municipal governments, and economic development people to get networks off the ground. These partners license Placemaker and distribute it to their independent businesses.

Scotto di Carlo says, “A customer on average, if they engage at a Placemaker business, will go to nine other businesses on the network. That’s the sort of return we’re seeing on the data.” Studies show that local businesses recirculate a greater share of every dollar in their local economy than national chains. One such study, conducted by Civic Economics in Monadnock showed that independent retailers saw a local recirculation of revenue rate of 62 percent, versus 13 percent by national chains.

Commenting on money staying local, Scotto di Carlo says, “That ability for one customer’s experience in an independent business to create community wealth is real, and it’s perhaps one of the most approachable ways that an individual citizen can create community wealth. It’s just shopping, eating local, and providing money for the people that live there – their neighbors.”

Scotto di Carlo attended The Salzburg Global program The Courageous Director: Can Corporations Better Serve People, Planet, and Profit?, which is part of the multi-year series, the Salzburg Global Forum on Corporate Governance. The session is being supported by Shearman & Sterling LLP, BNY Mellon, UBS, Barclays, CLP Group, Goldman Sachs, and Teledyne Technologies. More information on the session can be found here.

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