ImpactAlpha, Feb. 10 – Corporations are sitting on a collective $4 trillion in cash, fueled by tax cuts and low-cost borrowing. How they deploy the assets amid a pandemic, a climate crisis and a racial reckoning could shape the economy for decades.
That heightens the scrutiny of Tesla’s $1.5 billion investment in Bitcoin, the speculative digital currency. Musk’s embrace sent Bitcoin’s price soaring, making a mint for crypto-investors. Other corporations are deploying their cash to create more lasting value to companies and stakeholders.
Small business lending
Companies including Google, Netflix, Twitter, Mastercard and Square (which has also invested in Bitcoin) have put their balance sheets to work in minority-owned banks and community lenders that are helping underserved small businesses survive the pandemic. Goldmans Sachs committed $130 million to Hope Enterprise to support small businesses the Deep South.
Microsoft and Amazon have created $1 billion-plus venture funds to accelerate technology to help them decarbonize their operations and address the systemic risk of climate change. (Musk’s foundation is funding a $100 million prize for innovative carbon capture and storage technology).
Apple, Facebook, Google and Microsoft have together committed more than $5 billion to affordable housing funds and development. Amazon ponied up $4 billion for employee safety and health last year after initially being criticized for its COVID response.
Another simple idea with far-reaching impact: corporations paying their fair share of taxes. From parking cash in green infrastructure banks to building out new markets for renewable energy and broadband in emerging markets, check out our own list of corporate cash suggestions.