Our topic this month is ESG Backlash, the second of the themes for the year we identified in our Actions for Business Report 2023.
That backlash is coming from two directions, not one. The first source is noisy and grabbing the headlines. It originates in the US political and culture wars, now being echoed on this side of the Atlantic. The second, more thoughtful, source is not external opponents but insiders, those in the sustainability movement worried both about lack of ambition and underperformance, and about overreach, aka greenwashing.
Concern about overclaiming is not restricted to company behaviour. Governments are implicated too, with the UN Secretary-General describing COP climate change targets as having “loopholes wide enough to drive a diesel truck through”. Whatever the aspect, sustainability remains firmly in the spotlight.
In this issue’s news round-up, our writers give their own take on recent developments. In our longer read, they pick up the theme of business still falling short on action, and characterise companies in three groups – opportunistic, aspirational and committed. Ever practical, they set out five steps a company can take to navigate the current turbulence.
As for myself, I certainly welcome the second backlash, and even the first in so far as it forces us to reflect on fundamentals. In that quest, the shorthand “ESG” is becoming increasingly unhelpful and polarising. Instead, let’s focus on how companies create value over the long term in a responsible and sustainable way, for the benefit both of providers of capital, and of customers, employees and all others engaged in that enterprise. The evidence is surely compelling, to any fair-minded observer, that taking a wider-angle view of risks and opportunities is the best way to achieve that.
Visit the March Monthly Briefing here.