Book review: Measuring Good Business - intro

Book review: Measuring Good Business - Making Sense of Environmental, Social and Governance (ESG) Data - introduction

Rarely have I read a book that so fully and squarely corresponds to my sphere of professional expertise / passion-purpose and “speaks” to me. It is well researched and thoughtfully written and I highly recommend the read for anyone in the corporate sustainability / sustainable finance space (which, as we know, are two sides of the same coin).

I can also say that I emphatically agree with virtually everything Richard Hardyment exposes and proposes.

Perhaps the one notable exception is the occasional (unintentional?) lumping together of company-sourced performance data with esg ratings under the umbrella term ‘ESG data’. As we know, ratings are opinions, based on proprietary methodologies (which may or may not be clearly exposed) that use corporate performance data as inputs, while the latter are intended to be objective, relevant, and reliable information on company processes and performance… and definitely what I prefer to focus on ??.?

I propose to summarize key insights and takeaways in five posts over the coming weeks, each one corresponding to a chapter of the book:

1?? Moral merchants

2?? ESG World

3?? Good measurement

4?? Making a difference

5?? Solutions for inclusive impact

In writing this book, the author aims to stir a debate about whether we are measuring the right things in the right way. He sees a disconnect between the current drive for ESG data and the real goal of embracing sustainability. And while he recognizes the huge need for standardized, regulated disclosures, and scientific metrics (to cover such things as emissions, water, and waste), he posits that there are limits to this type of uniform, representational measurement, especially for the “complex, contextual, dynamic, abstract, and subjective realities of corporate sustainability impacts and dependencies”.

The author states that “if we are entering a new era where business is expected to be more widely accountable for its impacts, that transformation has to be supported by better data”. This book is a journey to map where we have come from and where we need to go next when it comes to ESG data. It is a call to those in the ESG World “to revive and reinvent ourselves for a new world where accountability, impact and ethics matter”.?

Perhaps the best way to entice you to embark on such a journey is to start with the ending, with Richard Hardyment circling back to the purpose of the corporation:

“Why does a corporation exist? It must be for the sake of society – the useful products, the meaningful work, the social value and the economic surplus that is created by people and for people. We must aspire for a world where business powers a regenerative economy that enriches life. Our task must be to capture this social value through data, through people, for people, as best we can. It’s then that our true endeavour can begin. Because the numbers are never the end. It’s what we do with the data that counts.”

Amen to that. ??

On a slightly less philosophical note, I ended my reading with the realization that fundamentally, the premise of this book is about collecting the right data so that we can interpret it and use it to manage and achieve what we want to achieve. As companies shift from reporting as an end to proper data collection as inputs to the management of their impacts, risks, and opportunities, we are realizing that we don’t yet have (all) the right data, i.e., data that is both accurate and appropriate.

And so the journey continues.

Next week: Chapter 1 - Moral Merchants (my personal favourite)