Day 1 of the Aspen ESG Summit

Day 1 of the Aspen Institute Business & Society Program 's ESG Summit on #EvolutionofESG started with a 14 mile hike up, appropriately given the ESG backlash, Red Mountain starting on the Sunnyside Trail then Red Mountain Round Road, returning on the Shadyside trail before finishing back on Sunnyside.

I just made it back in time for the opening plenary on "Resetting the ESG Narrative." A Poll of the 150+ attendees showed that the majority of attendees felt that the anti-ESG backlash was hindering their ability to do their job and wanted more proof of the business case as well as engagement by CEOs. However, there was also widespread recognition of the magnitude of green-hushing (aka self-censorship) with numerous participants highlighting, some with pride, their excising of the term ESG from their corporate communications.

An interesting discussion emerged as to whether this self-censorship matters. Is ESG by another acronym just as sweet? Are we just experiencing some bumps and turbulence in the US no worse than our planes were buffeted by in landing in Aspen that will do no harm to the long arc of history? Participants seemed aligned with this optimistic view. Companies are making progress, employees are demanding, investors are seeking, Boards are attentive, regulation, especially in the EU, is progressing, CFOs are increasingly calling upon and working in partnership with CSOs.

I myself felt a disconnect between the optimistic sentiment and the poll results where so many reported material impacts of the anti-ESG movement. I am unsure how we reset the narrative when ESG has become the evil that cannot be named. I had hoped for more engagement with the question of how we act to reset the narrative instead of encouragement to just be patient with the long arc of history. One questioner shared my conerns highlighting the need for the private sector to "take the narrative back" and challenging panelists as to whether self-cenorship really serves the purposes of sustainability and stakeholder capitalism. The session finished more optimistically with Tom Petty's I Won't Back Down playing in the background.

In the following break-out session, I joined 68 other participants in the session on storytelling and shared my own perspective as an appointed provocateur that the anti-ESG movement has had little impact at Wharton where we have increased our corporate research partnerships, launched an ESG major, increased supply for ESG co-curricular activities and had a 1000% increase in philanthropic support YoY.

In a wide ranging discussion, other participants were split between emphasizing purpose and financial value or the business case. Many acknowledged the legitimate nature of some of the anti-ESG critiques from data to analysis to greenwash. The optimists viewed the anti-ESG movement as an opportunity to refocus attention onto financially material ESG factors rather than broader claims on impacts on people and planet. Others noted that this was the best recipe to convince skeptical CEOs. Pitches might differ across firms and industries but many in the audience saw the virtues of a hard-edged business case. Coincidentally, an article published today summarized my work that highlights value and values can be aligned.

The session closed with some broader reflections on the necessary tradeoff beteween higher reporting requirement and time to actually integrate and enact ESG policies. We also discussed the challenge of messaging on ESG for diverse audiences across different channels of communication while still appearing unified and organized.

After a wonderful outdoor reception, we returned to the main auditorium for dinner and a provocative discussion on Geopolitics. How much has the Russian invasion really changed Europe and, similarly, what are the strategic implications of US-China decoupling/derisking/diversification. Does Geopolitics become part of ESG or ERM going forward? Where does human rights fit in to Geopolitics and ESG?

Looking forward to continuing these conversations and meeting more participants in Day 2 tomorrow!