ESG is the latest buzzword in business & biodiversity circles, but it’s not actually new - only newly popular. And it’s one among many terms and acronyms in this field, which may be familiar but are often poorly understood - ESG stands for “environmental, social and governance” investing criteria. Understanding concepts like ESG is consequential because their success relies largely on convincing the general public of their value and their virtue. As we discuss in this episode, however, they are not necessarily all that they’re made out to be.
To elucidate this topic with me is Ken Pucker. Ken is a professor at the Fletcher School at Tufts University and Advisory Director at the Boston-based Financial Services firm, Berkshire Partners. He was previously Chief Operating Officer of the outdoor footwear and apparel company, Timberland, one of the first companies to take an interest in sustainable production. He has written extensively on ESG and related issues in Harvard Business Review among other publications.
01:47 A brief history of CSR, ESG, and sustainability reporting
09:41 ESG is not about the impact of companies on the environment
13:53 Other concerns about ESG
19:46 Impact investing
22:39 ESG makes policymakers complacent
26:36 Are CSR and ESG in need of reform or are they fundamentally flawed?
29:11 Investors care about impact, but not about how much
31:17 Shopping around effect
38:27 Transparency is not the main thing
41:35 Has TCFD had any effect, and will TNFD have any effect?
43:43 Should corporations serve shareholders or stakeholders?
Links to resources
ESG Investing Isn't Designed to Save the Planet - One of Ken's most recent articles in Harvard Business Review
Who Cares Wins 2004 - Publication in which the term "ESG" was introduced in 2004
GIIN - Global impact investing network
The Case Against Corporate Social Responsibility - Wall Street Journal article by Aneel Karnani
Do investors care about impact? - Article mentioned by Ken
TCFD - Task force on Climate-related Financial Disclosures
TNFD - Task force on Nature-related Financial Disclosures