Moving from “ESG” to “competitive sustainability”

Competitive

Here’s this note from Alison Taylor:

I finally got the chance to read the important and much-discussed paper from Cambridge Institute for Sustainability Leadership (CISL) on why we need to move from “ESG” to “competitive sustainability”.

Much of the diagnosis of the problem is spot on, and exactly what I’ve witnessed during my own career. The diagnosis of the path forward, which I found less clearly articulated, is that: “It is time to stop putting ‘sustainability thinking’ into business and start putting ‘business thinking’ into sustainability. We need to shift to an agenda of ‘competitive sustainability’.” (This is what people argued ESG was, in fact, but alright, I won’t nitpick).

Ok, though this sounds like the kind of wordsmithing sustainability people love and everyone else finds bewildering. I’ve been guilty of this kind of tortuous argument myself, though not recently 😊. I’m not sure that coining a new term will move the needle, so what exactly are we talking about?

The recommendations come down to more policy engagement, and “building social engagement and buy in”. Ok, but then we are missing two things here:

1) Any discussion on what responsible policy engagement looks like and how this is done. The entire paper is about firm level actions and internal governance and decision making are not explored.

2) Any thinking about the risks of companies pushing “social engagement” in a populist, politically fraught era. There are so many ways this can go wrong.

The discussion of failures in this paper is way clearer than I expected from the shorter op eds, but I’m left hanging on what any of the recommendations actually look like in real companies, and I don’t know that there’s a realistic discussion about second order consequences of more political leverage on these topics by companies. That’s before we get into how they are set up to do this, and why they would take it on. If you are inviting the political risk people to the table, then you might find they reach inconvenient conclusions.

Over and over again I find that sustainability thinking hits a wall when it comes to working with risk, compliance, government relations, etc etc etc.