Home Correction letter Letter: Anti-Reawakening ESG Rhetoric Will Harm Society

Letter: Anti-Reawakening ESG Rhetoric Will Harm Society

0

Astonishment and horror are the only valid responses to “the global rise of ESG collides with anti-awakening politics in US capitals” (Moral Money, FT.com, July 25). Yes, it’s true that “from Tucker Carlson to Mike Pence, bashing ESG investing has become a popular sport among American conservatives” and, yes, it’s true that in the “best of all possible worlds ‘such criticism'[might] be ignored as a political posturing”.

However, as Cacambo once observed in Candide, optimism is “the stubbornness to maintain that everything is the best when it is the worst”. Anti-awakening rhetoric, if tolerated, will have real and detrimental consequences not only for the states that embrace it but also for job creation, business and society.

Environmental, social and governance aspects should be considered as a necessary adaptation to a rapidly changing competitive landscape. A global cost correction is now underway and it is time to foot the bill for the negative externalities imposed on society, including pollution and carbon emissions. Companies and investors that do not adapt to these new realities will eventually perish. There is also an opportunity to bring innovative and sustainable products to market that meet changing customer demands. Consider electric vehicles and plant-based diet products – there’s nothing “woke” about adapting to changing market conditions.

In the past, companies may have viewed ESG purely as a public relations issue, but today it needs to be considered in terms of competitive adaptation and the real possibility that directors are potentially exposing themselves to accusations of breach of duty and claims against them for deceit and deceit. conduct.

And for those who claim ESG metrics are problematic; yes, indeed, but we cannot throw the baby out with the bathwater. Instead, we must work diligently to refine, improve and standardize these measures to truly reflect underlying business practices. This is the only way for ESG metrics to be useful for investment decisions. Fundamentally, there is nothing “woke” about understanding corporate social performance: it is crucial for long-term survival and competitiveness.

Republicans are the business party, but removing barriers to long-term competitive adaptation is certainly not a business-focused way forward. Unless, of course, the real purpose is the protection of vested interests and political donations.

Dr Ioannis Ioannou
Associate Professor of Strategy and Entrepreneurship, London Business School, London NW1, UK