We’re doing some brand messaging work with a renewable energy company at the moment. So we’ve been pondering ethical business.
As the Bloomberg chart shows, we’re witnessing a boom in sustainable investing. But to quote an executive we’ve been working with this isn’t the world going green because the world wants to go green. It’s because the green electron is now cheaper than the brown. So it’s about profit primarily, but it’s also delivering pro-planet benefits.
We’re doing some brand messaging work with a renewable energy company at the moment. So we’ve been pondering ethical business.
As the Bloomberg chart shows, we’re witnessing a boom in sustainable investing. But to quote an executive we’ve been working with this isn’t the world going green because the world wants to go green. It’s because the green electron is now cheaper than the brown. So it’s about profit primarily, but it’s also delivering pro-planet benefits.
This is Ken Pucker’s point. Bloomberg quotes Pucker, former Timberland COO and now university lecturer in sustainability:
The 20-year focus on corporate social responsibility reporting and the current frenzy on ESG investing have created an impression that more is happening to address social and environmental challenges than is really happening.
Ken Pucker, former Timberland COO
Pucker calls for more citizen action. And for businesses to work together to fix not just their own houses but the impact of their supply chains too. Questioning if the investment community is truly set up to deliver the impact we need, Colin le Duc, Founding Partner of Generation Investment Management said of sustainable investing:
We’re now at a point where we need to institutionalise the idea of allocating for purpose, not just for optimising risk and return.
Colin le Duc, Founding Partner of Generation Investment Management
Le Duc was speaking at the Tomorrow’s Capitalism Forum. It’s an event organised by Volans, the change agency established by one of the leading thinkers in sustainability: John Elkington.
Elkington coined the term ‘triple bottom line’ (3BL) back in the 90s. It refers to the corporate imperative to focus on people, planet and profits. 25 years later in 2019 he recalled the phrase in a bid to refocus on the original goal of 3BL: radical system change.
It’s not enough to focus on profit. Or on profit and planet. Radical change will only come if you focus on all three. And that means as much attention and effort must be directed to people initiatives.
The FT suggests the fastest growing bit of ESG was the S during the pandemic, with Covid, much has it has in other arenas, accelerating existing trends. It does feel like business is beginning to address these issues – but there’s so much further to go. Particularly when the commitment to reporting on such basic endemic structural inequalities as the gender pay gap seems fragile and easy to suspend.
We’ve been working on green initiatives seriously as a part of corporate social responsibility or latterly ESG for thirty years. But it feels like we’re only now starting to take social issues seriously. It’s driven by the power of smartphones giving marginalised voices a platform and an opportunity to organise and congregate at scale. And the impact hits first on reputation.
Note the Brewdog culture storm. That was a battle played out very publicly thanks to social media.
The cynic in me says the reason that we don’t see more progress in social causes is that humans simply aren’t as tradable as carbon.
The positive economic impact of social progress is hard to achieve, fraught with complexity and far from a quick return. We’ve spent 30 years offsetting our toxic carbon usage by ‘buying’ green morality elsewhere – and publicly reporting it. It’s hard to imagine transferring that to people initiatives.
And when private equity investors are backlashing against the rigidities of holding companies to account for their ESG responsibilities, I fear that markets alone aren’t sufficient to solve these massive global problems.
The biggest question we all need to be asking ourselves is how do you harness markets to deliver a smooth and just transition to net zero by 2050? You harness the international financial architecture. That needs the G20 to tell everything within that architecture, to change what they’re doing and make it make it fit for the challenge of this century
Steve Waygood – Chief Responsible Investment Officer at Aviva Investor
When it comes to ESG efforts, it feels like while there’s still so much to do, we’re doing better with planet initiatives. We’re talking about improving carbon reporting and bringing in carbon taxes and allowances. But when you look at people initiatives, there’s a stark contrast. We’re not analysing and measuring consistently. We’re not tracking progress. And where are our equivalent net zero goals? It feels like we are still so far behind.
Business can solve some issues – more if they work together to create powerful leverage. Consumers can demand better and vote with their feet. But we need more than that.
We need more voices, as citizens with civic responsibilities not just as consumers with purses.
Even more than that we need stronger action from political leaders. And we need more urgency.
If the 1990s marked a turning point in planet initiatives: the rise of corporate social responsibility and the beginnings of a move towards decarbonisation, perhaps #metoo #blm and the impact of Covid will prove a turning point in addressing the people imperative.
Imagine if businesses were able to offset their social responsibilities
Imagine hearing a company overtly declaring they are offsetting their exploitation of child labour, for example.
Or picture this scene: you need to restructure your workforce. An easy way to do that is to make your workers on maternity leave redundant. After all, they’ve already handed over their responsibilities and are out of the workplace. Minimal impact to client relationships and operational efficiency. All you need to do to make up for that is support a local socially focused charity. It’s tax deductible, good for your external brand and it all balances out in your ESG reporting at the end of the financial year.
Shocking, but would it drive positive change?
