The elephant in the room: “The ESG Contradiction”

Here’s a note from Dr. Raj Thamotheram that plugs this article entitled “The Elephant in the Room: The ESG Contradiction” written by Andrea Webster, Paul Smith and Kübra Koldemir:

Many articles by ESG academics & practitioners today strike me as inauthentic or at best half truths. The “win win” ideology is really not consistent with reality – 20 years ago it seemed a possibility worth getting behind but now there are trade offs which can’t be fudged.

This article is different. It’s not fully comprehensive (eg it doesn’t mention corporate political irresponsibility aka #corporatecapture) but no article can be perfect & it’s a very good basis for further developments. So I hope you read it and then start to act on it.

And here’s the intro from the article:

We all agree that finance has a key role to play in getting us to net zero. But we can’t ignore the elephant in the room: the inherent conflict between the “E,” the “S,” and the “G” in environmental, social, and governance (ESG) investing. As much as we might wish otherwise, the goals embedded in these initials don’t always align with one another. That’s why a compromise must be made. Investors, asset managers, and businesses have to agree on which of the three is the most important.

So, what’s our position at SustainFinance? We believe social, the “S,” should be the highest priority. Why? Because sustainability is all about humanity. The “S” factor is broad. It varies by country, culture, and context. Figuring out how these can be lined up within the boundaries of net-zero goals must come down to people.