And a Shout Out to Enviro Hero Margaret Atwood
Dear newsletter readers,
Sorry about the recent lag between issues. As you know, my day job is encouraging business leaders to pursue environmental opportunities in the most ambitious way they can. I’ve been especially busy these past few weeks doing just that – working on the very things we write about here.
Doing this work bolsters my general sense of optimism. There is a lot of positive momentum underway. More private sector organizations are committing to ambitious environmental problem solving in ways that make business sense.
But these business leaders are also asking specific, hard questions about ESG. (Tough questioning also seems positive to me – it’s good to be talking about all of this, and it should lead to improvements). The ongoing war raises additional difficult issues. People ask:
- Are there really industries that are intrinsically contrary to ESG? Take defense and fossil fuel energy companies. Don’t today’s circumstances show that we need them? Should we put less emphasis on what companies do and more on how they do it?
As an example, is it positive, folks ask, that we have Western-headquartered oil and gas companies who are now committing to reduce their scope 1 and 2 emissions to zero, helping customers reduce their emissions (ie, the oil companies’ scope 3 emissions), investing in various ways to accelerate the energy transition (renewables, sustainable fuels, carbon capture, hydrogen, and carbon removals), and are now withdrawing from Russia? Is this not good ESG behavior? - Similarly, should we evaluate companies based less on their past performance and more on future commitments? Can’t a company with an unattractive past record more than redeem itself with a very positive going forward plan?
- Under what conditions should ESG dollars be pulled out of a specific region? Does a company that has been doing business in Russia, for example, have any obligations to employees, suppliers and customers in Russia? Or, if pulling out of Russia is appropriate, what about other regions where lots of bad stuff happens? Is it the responsibility of business or the government to resolve such matters?
- And so on…
But most of all I get asked a more fundamental question: Does ESG work as an overall framework to drive positive business activity? Or is it a catch-phrase du jour, one that sounds good but lacks substance and will be left behind in a few years?