I sense a shift in the geist where ESG is concerned. What just a few years ago was touted as the way forward for capitalism is more and more moving to the margins. Please join us at 9:00 am (CST) on Monday, July 18th for a Zoom round table on ESG – what does it really mean and what can it accomplish?
From my perspective, ESG is just the most current mantra for finding a way to have capitalism without negative side-effects.
As the industrial age emerged in the early 19th century, the common law of England and America responded by creating the law of negligence – taking responsibility for the harm you cause when you fail to use due care. Later came causes of action in warranty and strict liability for defective products. Statutes were enacted to enhance the contract rights of workers and to protect consumers and to limit the market power of monopolies. In the 1930s in the U.S., financial capitalism was required to truthfully disclose all facts supporting or reducing the value of securities.
In the 1970s, investors were prodded by social activists to direct their capital away from firms which were not socially responsible and consumers were encouraged to take their trade elsewhere. In the 1980s, the quality movement here taught companies how to give better value for money to customers and engage employees to become more proficient in creating such value. In a re-emphasis, companies were encouraged to see the intangible ways of enhancing financial value by taking better care of stakeholders.
In the early 1990s, the need for ethics was introduced in business schools to reframe the culture of decision-making in for-profit firms. Then came advocacy of the strategy of corporate social responsibility. In the early 2000s, the approach to changing the outcomes of capitalism looked at measuring and reporting impacts – the Global Reporting Initiative. The Sustainability Accounting Standards Board was formed. Then, the United Nations Sustainable Development Goals were promulgated to induce private firms to devise and deploy business models which both satisfied consumer needs and provided public goods in addition.
In 2019, we were advised that private firms needed a purpose, other than just making a profit. We heard of conscious capitalism, common good capitalism, inclusive capitalism and the economics of mutuality.
The latest iteration is ESG – environment, society and governance. What is meant by society and governance is none too specific.
What, then, is the role of ESG investing and reporting? Please help us understand what is going on.
To register, please email email@example.com.
The event is free and will last about an hour.