ESG — in whose best interests?

Reducing carbon emissions, halting global warming, improving social outcomes, enhancing good governance, whatever these things mean, in their various manifestations, they are all good things. We can all agree about this. Right? Actually, it’s not quite so simple. In broad terms (and, in reality, this is a fairy shallow dive into this topic) we can identify three constituencies of ESG — and they do not always overlap.

First (and NOT in order of priority or importance) there is the constituency we might call ‘Economic ESG’. This constituency represents the breadth of the financial sector, particularly investors. Amongst this group we find those who fully support the entire ESG agenda but also those whose interests are more selective; giving priority to particular or specific ESG matters whilst being relatively uninterested in others.

Next we have, what we can call, the ‘Global ESG’ group. In this group there are those whose mission is primarily or solely focused on promoting ESG concerns (including the SDGs) as an universal good and those who promote the broad range of ESG concerns alongside financial considerations. In practice, of course, the dividing line between these two Global ESG groups is not hard but rather shaded.

Finally, there is the ‘Non-ESG’ group. Members of this group seek to pursue their singular financial interests without regard for ESG concerns or any other concern than their own (financial or other) gratification. This group (broadly constituted) is responsible for actively harming the full range of ESG (and SDG) matters.

In practice the Economic ESG group and the Global ESG enjoy a considerable overlap (as represented in the Venn diagram above). Nether of these groups has anything in common with the Non-ESG group. In fact, the interests of the Economic ESG group and the Global ESG group are directly threatened by the Non-ESG group.

The above presentation is, of course, a significant over-simplification of reality. Nevertheless there is enough of a degree of truth to this characterisation to point to important strategic objectives. To wit:
1) strenuous efforts must be made to shrink the Non-ESG group,
2) the shared area between the Economic ESG group and the Global ESG group must be enlarged. Failure to make significant progress on both these strategic objectives will seriously undermine long term social and economic sustainability.

Head of Social Policy at Bedford Row Capital Plc
Professor Kevin Haines:
kevin.haines@bedfordrowcapital.com

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Structuring and Issuance of Eurobonds. Liquidity and Asset backed. AIFMD exempt solutions for distribution of yield products. Arranger and Lead Manager.

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Bedford Row Capital

Bedford Row Capital

Structuring and Issuance of Eurobonds. Liquidity and Asset backed. AIFMD exempt solutions for distribution of yield products. Arranger and Lead Manager.

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