If you live in sustainability circles it’s a moment of opposites. For leaders like myself, there are signs of progress: more companies are making C-Suite level roles, EU markets are requiring rigorous reporting and accountability, and there is even a Chief Sustainability Officer Barbie doll.
At the same time, I can’t open LinkedIn without reading commentary about how Wall Street and GOP leaders are pushing hard on an anti-ESG campaign, actively working to undermine the progress that has taken place, like SEC carbon accounting requirements. With the new House majority being sworn in, this conversation will continue through 2023.
As a quick primer, Environmental, Social, and Governance (ESG) is a term used broadly by the business community and financial markets to describe the social impact work leaders like myself do. Think anything from managing toxic chemicals, implementing sustainable packaging, to inclusive governance models and goal setting. This criteria has seen major traction as a way for companies and investors to track un-traditional business metrics, looking beyond annual revenue, profit margin and year over year growth.
Let’s be clear, Wall Street has never been woke. But they will always care about risk. So while many of us work hard to do what’s right for people and the environment, we must also frame it within the context of de-risking business. Supply chain risks due to raw materials being impacted by droughts exacerbated by climate change. Health and PR risks associated with the lack of proper safety assessment of chemicals used in a brand’s products (as seen when Olaplex’s stock plummeted after being called out for using an ingredient linked to infertility in their hair mask, quickly reformulated as you would expect). Or the risk of companies asleep at the wheel as the consumer market rapidly demands more sustainable and safer products. Wall Street players who will win long term, will also be the ones who care about ESG.
Barbie’s new CSO role is cool and more people are being appointed Chief Impact/Mission/Sustainability Officers, but make no mistake: this field is still a role that requires constant fighting. Taking on internal leaders who are convinced ESG is nothing more than a cost to the business. Lip service from people who say they care, but leave your work underfunded. Larger fossil fuel funded social campaigns to create confusion and misinformation about climate change and the impacts of toxic chemicals on our health. Deep industry financing of political campaigns.
This recent anti-ESG conversation does little to ruffle my feathers. It’s the same arguments we have all been facing, just in a different news cycle.
The business and NGO community must continue to invest in leaders with guts, who have the technical skills and training to properly navigate this work, coupled with the emotional IQ to not just bulldoze but also bring people along in the process. We need entire organizations, not just the mission oriented teams, to care and embrace the difficult daily decisions. And we need press outlets to cover the progress, challenges and science behind all of this work.
Progress to better protect people and the environment is a train that continues to move forward, even if slower than many of us would like. Let’s not let the “anti-ESG” rhetoric become anything more than finance bro locker room talk.
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