The lack of individual motivation and how that hinders the climate battle
– We have a misalignment between ESG and individual incentive/ rewards, especially in the risk and capital market – leading to an opportunity to game the system.
– Human behavior at the boundary of complexity requires a lot more research.
This article by Tony Fish about the psychology involved with climate change is food for thought. Tony’s bottom line is:
As a takeaway, ESG focuses on three peaks but misses Peak Individual Purpose. When we start to unpack our incentives and motivations, we uncover conflicts. Because we have a misalignment between ESG and individual incentive/ rewards, especially in the risk and capital market, we have created with ESG a perfect market for individuals to game. The game will not lead to better decisions or better outcomes.
Rufus Howard commented on a post by Tony, noting:
Hi Tony Fish have you explored Schwartz, S. et al. “Refining the theory of basic individual values.” Journal of personality and social psychology 103 4 (2012): 663-88? This paper and other works by Schwartz theorize that a focus on one aspect of values (i.e. self-enhancement) will reduce the focus on the opposite aspect (i.e. self transcendence).
This matrix of values can be applied to individuals, but also can be seen in organisational and cultural values. This model illustrates why a focus on power and dominance of resources by individuals is incompatible with a focus on concern, tolerance and the environment for society.