Voluntary, market-led sustainability isn’t enough (we need government)

Here’s a note by Duncan Austin:

Excellent new article by Ken Pucker in Institutional Investor that concisely reprises the history of CSR, SRI and ESG and shows how it has become a ‘long-developing feint’ now ‘distracting us from the work needed to reset our economic system’. Very nicely done, with lots of telling details.

I would particularly recommend the article to those who are newer to the ESG world as the history makes clear that ESG was born, not out of a strong belief that it could lead us to sustainability, but more pragmatically because it was all that our system could tolerate at the time and there was enough anecdotal evidence to give it a try rather than do nothing at all.

However, two decades on, it increasingly feels that the meta-strategy of voluntary, market-led sustainability (CSR, SRI, ESG, impact, disclosure, divestment, etc.) will not be nearly enough to create a sustainable economy before it is too late.

If so, as Ken concludes, the private sector needs to become an *authentic* partner in establishing new rules and regulations that can drive sustainability faster. In practice, this means that business needs to help re-legitimize the role of government as a body that can impose new rules and prices, even if they are costly by the (unsustainable) way we currently measure ‘profit’ and ‘cost’.