"Moving Beyond ESG" is the title of an article of this edition of Harvard Business Review.

Net, I agree that the term ESG has becoming been confused and conflated and I worry that more, different or better reporting will not lead to sufficient social or environmental change.

"Moving Beyond ESG" is the title of an article of this edition of Harvard Business Review. It is written by Robert Eccles a prolific influencer and actor in the ESG movement (from research on the link between sustainability and equity returns to integrated reporting, to SASB, to the culture wars of ESG ..). Credit to Bob for working to build bridges between liberals and conservatives (even if I disagree with some of his characterizations of other passionate proponents of sustainability).

In this piece, there is a lot that I think makes good sense, and other notes of dissonance (at least for me).

Agree:

* “#Impact is fiendishly difficult to quantify”

* “A company can do poorly on #ESG and still have a positive impact.”

* “#Regulation is the primary way that #externalities are mitigated.”

* “But reflexively opposing all regulations is a mistake. It is fair for companies to complain that civil society is asking too much of them. But the corollary is that they need to be clear about what government should be doing to address negative externalities.” (Though I do not see this happening any time soon.)

Disagree:

- Remedy #1: “Be Clear About Your Purpose.” I believe that corporate purpose is oversold. There is a reference to ExxonMobil whose corporate purpose is “Fueling the World Safely and Responsibly” …really? The article references Nike’s purpose and its link to the SDGs. Yet, Nike’s purpose is “to bring innovation and innovation to every athlete in the world.” And, they just laid off 20% of their sustainability team including its leadership.

- Remedy #2: “Be Candid in your #Sustainability Reporting.” It would be nice, but ISSB does not insist on double materiality. Also, there is a chasm between reporting and remediation. Reporting output is too often confused with impact.

- Lauding Phillip Morris USA (where Bob reveals that he serves as a paid advisor) for “innovating” a new “heated” tobacco product that its own CEO boasts “may not be subject to flavor regulations” because it “doesn’t fit” in existing fiscal categories and also avoids taxes. The company sold 613 billion cigarettes last year and is the subject of a raft of criticisms from obfuscation to deception and more.

Net, I agree that the term ESG has becoming been confused and conflated and I worry that more, different or better reporting will not lead to sufficient social or environmental change.

Auden Schendler Ali Sheridan Joel Makower Grant Harrison Lawrence Heim Andrew King Aswath Damodaran Alex Edmans Alan Schwartz AO Aniket Shah, PhD Bill Baue Jyoti Banerjee Tariq Fancy Desiree Fixler Tom Gosling Harald Walkate Matt Orsagh Tim Mohin Judy Samuelson Lisa Sachs Elizabeth Seeger Noel Kinder Lucas Joppa