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Think you know ESG? Skeptics say it’s a muddled concept, but here’s why it still matters.

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Making ESG meaningful

In the news

•

ESG skeptics. ESG-themed investments (that is, those which focus on environmental, social, and governance priorities) are expected to surpass $40 trillion in assets this year, suggesting that the concept has become deeply rooted in global markets. But the term itself is increasingly ridiculed by detractors. Critics claim the term is hazily defined, has failed to reduce income inequality, and has become a political lightning rod. Even some proponents acknowledge that it might be time for a rebrand—while maintaining that the underlying concept remains important. [Bloomberg]

•

Putting ESG into practice. A growing consensus holds that embedding goals like sustainability into an organization’s DNA can improve operational efficiency, employee engagement, and resilience. Many companies disclose their ESG policies, yet they haven’t gained an advantage by doing so. One possible explanation: few companies integrate ESG-driven ideas into their business strategies. To attain a competitive edge, senior leaders must first identify the ESG issues that matter most to the business and to stakeholders. [HBR]

While the acronym ESG as a construct may have lost some of its luster, its underlying proposition remains essential at the level of principle.

On McKinsey.com

•

Backlash builds. Although more than 90% of S&P 500 companies now publish ESG reports, backlash seems to be building. Critics describe ESG as a “woke washing” sideshow that distracts from a company’s core efforts. Yet many companies today make major decisions in response to societal concerns and commit to science-based targets. Businesses charged with creating long-term value must address externalities such as greenhouse-gas emissions, say McKinsey senior partners Lucy Pérez, Hamid Samandari, and colleagues.

•

Whatever you call it, it matters. While the acronym might be in need of a refresh, ESG considerations have grown ever more relevant as executives look to future-proof their organizations. Regulators, stakeholders, and workers all insist that companies should transparently and quantitatively address their effects on society and the environment. In the end, companies must earn their social license to operate by acting in a manner deserving of trust. See three responses to ESG skeptics, including examples of some companies that have managed to embrace ESG to good effect.

Learn why ESG matters

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by "McKinsey On Point" <publishing@email.mckinsey.com> - 12:28 - 22 Sep 2022

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Think you know ESG? Skeptics say it’s a muddled concept, but here’s why it still matters.

Making ESG meaningful

In the news

While the acronym ESG as a construct may have lost some of its luster, its underlying proposition remains essential at the level of principle.

On McKinsey.com

Archives

in

info@learn.odoo.com

Tapping into opportunities in the US wellness market

Put an end to dead-end work. Here are some how-tos.

Think you know ESG? Skeptics say it’s a muddled concept, but here’s why it still matters.

﻿Making ESG meaningful

In the news

While the acronym ESG as a construct may have lost some of its luster, its underlying proposition remains essential at the level of principle.﻿

On McKinsey.com﻿

Making ESG meaningful

While the acronym ESG as a construct may have lost some of its luster, its underlying proposition remains essential at the level of principle.

On McKinsey.com