Is Business Broken? Revisiting ESG: How Did We Get Here?
May 9, 2024
Eddie Riedl, a distinguished accounting professor at BU Questrom, and John Streur, former CEO of Calvert Research and Management, dive deep into the evolution of ESG. They trace its roots from early corporate ethics concerns to its global prominence today. The discussion highlights the shift from traditional financial metrics to comprehensive ESG standards, the role of market mechanisms in addressing environmental issues, and the myths surrounding capitalism's compatibility with social responsibility. It's a fascinating journey through business ethics and accountability.
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Early Investor Accountability
- Even in the 1600s, investors needed mechanisms to understand companies' activities, including unethical practices like slave trade.
- Early systems of accountability emerged to hold companies responsible for their social impact.
Globalization Amplifies ESG Issues
- Globalization and differing regulatory jurisdictions made ESG issues more visible and critical.
- Supply chains spanning multiple countries expose companies to social concerns like child labor.
Climate Change Drives ESG Focus
- Climate change has intensified in its immediacy over the past 20 years, affecting insurance and property values.
- Environmental risks are now more obvious and pressing, fueling the ESG movement.