The future of ESG is about right-sizing
Sydney | 15 March 2023
The future of ESG is about right-sizing
Wrangles about ESG herald a time to step up, not give up, on sustainable investing.
We were delighted to have you at our Future of ESG event.
ESG has enjoyed uninterrupted growth as a factor in the investment mix for almost two decades, but it is going through an identity crisis and could be in retreat. However, dismissive talk implies a misunderstanding of what ESG stands for and risks derailing industry efforts towards greater sustainability. Executing sustainability impact is a primary industry goal and ESG activities are still the best route for achieving it, despite its limitations. As a broad concept, ESG’s relevance and potential influence will likely be forever contested, but what is its best future path? In simple terms, it’s about organisations right-sizing their ESG ambitions, which means:
- Blending sustainability appetite with commitment
- Using motivations and values to determine the ambition
- Constraining with organisational capability and vision.
In simple terms, it’s about organisations right-sizing their ESG ambitions, by determining the appetite for and commitment to sustainability shaped by each organisation’s motivations and values and conditioned by organisational capability and vision.
This allows organisations to reach a Goldilocks position between too much appetite and ambition, which risks organisational illegitimacy or too little, risking organisational irrelevance or ineffectiveness. For those organisations with net-zero pledges – which are lightly underwritten but with very heavy commitments – getting this balance right becomes central to business strategy.
Event pre-reading: What’s in a name?
