ESG, CSR, and sustainability - are they more than hot air?
Anders Liu-Lindberg
Leading advisor to senior Finance and FP&A leaders on creating impact through business partnering | Interim | VP Finance | Business Finance
This is the channel "Trends in Finance and Accounting" with 125,000+ subscribers! Click "Subscribe" to receive a notification and an e-mail when I publish new articles on this channel every Thursday and the occasional Saturday.
Do you want to get notified whenever I post on LinkedIn? Then?go to my profile?and click the small bell icon below the front page banner on the right-hand side.
To follow my entrepreneur journey you can head over to my?Instagram account.
If you want shorter snippets of the future of finance and accounting then check out my?Twitter account.
ESG, sustainability, and related fields are amongst the dominant forces driving the current direction of Finance and business at large.
There is now a near-universal acknowledgment of the severity of the climate crisis, and of the moral imperative for us all to act to attempt to mitigate it. Most business leaders understand this too.
There is also, for better or for worse, a tertiary industry growing as a result of this shift in thinking - what we might call the 'sustainability business'. In particular, this includes organizations and professionals dedicated to practices and fields such as ESG and CSR.
Buzzwords, or more?
First, we must recognize that there will inevitably be some unscrupulous players who are using the new focus on sustainability simply as a marketing hook - just as there are unscrupulous players in every field.
The majority of sustainability practitioners are, of course, motivated by the same principles as the rest of us - not least the continuation of life on earth as a prerequisite for the continuation of global business. But even in the case of 'legitimate' sustainability professionals, it's crucial that we all understand the limitations of the field.
The horizons for ESG
The primary challenge facing businesses that wish to incorporate ESG practices remains the lack of established norms and standards.
As we've explored elsewhere in this series, the nascent sustainability industry has not yet agreed on overarching measures for success in ESG and CSR - or, indeed, on the goals that we are trying to meet.
In practice, this means that even well-meaning ESG implementations can be extremely difficult to evaluate, justify, and account for. This is a problem for a number of reasons, including the issues that it causes when trying to make a business case for the introduction of ESG and CSR programs.
Keep the faith, but ask questions
Many of these challenges are teething problems. They have to be - there is an existential imperative for business and society at large to deal with the climate collapse and associated crises, and for the time being ESG, CSR, and associated practices are the closest thing the international business community has to an efficient weapon in this fight.
But as Finance professionals we must exercise caution when evaluating claims made by ESG practitioners, and we must be clear-eyed about the business case for their implementation.
In particular, I strongly encourage all Finance professionals to familiarise themselves with the ongoing international efforts to establish standards and norms for business sustainability. There are several working groups currently convened with the goal of creating universal metrics that can be used to measure and benchmark these efforts. These cannot be adopted soon enough.
At the same time, it's vital that we all acknowledge the individual roles we can play within our organizations. We must all be vocal advocates for sustainable business practices - even when they may seem counter-intuitive or difficult to reconcile with short-term business goals.
There is a groundswell of support for and engagement with efforts to tackle the generational challenges we are beginning to face. We all owe it to ourselves, our business, and future generations to do what we can to build businesses fit for a changing world.
This was the fifth article in my latest series about how finance professionals should approach ESG in a proactive way that creates value for the company. You can read the previous articles below.
While you await future articles why not read my latest series about coding for finance professionals? You can read all the articles below.
领英推荐
Continue reading below for more articles about how digital is impacting Finance.
Anders Liu-Lindberg?is the co-founder and a partner at the?Business Partnering Institute?and the owner of the largest?group dedicated to Finance Business Partnering?on LinkedIn with more than 10,000 members. I have ten years of experience as a business partner at the global transport and logistics company?Maersk. I am the co-author of the book “Create Value as a Finance Business Partner” and a?long-time Finance Blogger?on LinkedIn with 90,000+ followers and 150,000+ subscribers to my blog. I am also an advisory board member at?Born Capital?where I help identify and grow the next big thing in #CFOTech. Finally, I'm a member of the board of directors at?PACE - Profitability Analytics Center of Excellence?where I support the development of new analytics frameworks that can improve profitability in companies around the world.
Climate alarmist such as yourself and the companies driving this ESG Market are Destroying the American Economy all in the name of fake unproven science. ESG is one of the driving forces behind 7 dollar gas in the USA that is hurting the average American Family and the ruling class could care less about this. Why should America destroy our economy and become totally dependent on China and other smaller nations to supply Americans, Electric Car Batteries when China is buying Coal and paying any price for it per ton simply because they know it's needed to run their economy. If you are going to continue to share all of the altruistic meanings of being an ESG Investor in your future newsletters then you have gone from giving good content to becoming an New Green Deal advocate and we see how well that is working for the US Economy don't we?
| Humanist | Managing Director | FINRA Licensed | Registered Rep. MSC-BD LLC | Investment Banking | Alpha Generation | Capital Markets | Strat Advisory | ESG | SDGs | M&A | DCF | CAPM | Finance | Economics | Business |
2 年Hi Anders Liu-Lindberg- here is the conversation that I recently had on the evolution of ESG, CSR, the SDGs, and Sustainability as a competitive advantage: https://www.dhirubhai.net/posts/aarontatewimberley_discussing-the-strategic-opportunity-of-sustainability-activity-6943562162040705024-rkG6?utm_source=linkedin_share&utm_medium=member_desktop_web
Fractional CMO & Infopreneur
2 年Informative and thoughtful article. It worries that each decade we have to rebrand 'sustainability' but retain the meaning. In past economists have coined theories like Tripple Bottomline and Balanced Scorecard, Community Shared Value. At the end of the day, the world demands sustainable use of resources for the people, planet and community.
| Humanist | Managing Director | FINRA Licensed | Registered Rep. MSC-BD LLC | Investment Banking | Alpha Generation | Capital Markets | Strat Advisory | ESG | SDGs | M&A | DCF | CAPM | Finance | Economics | Business |
2 年I think maybe instead of being critical of "E.S.G., the S.D.G.s, Sustainability, and C.S.R." people should look at the core purpose and how these concepts came into existence. Even if you go back a decade, before the emergence of sustainability needing to be the common thread throughout the business, one could argue that a company with a C.S.R. programme enjoyed better reputation, happier workers, more profitability, and better alignment with community stakeholders. I just gave a presentation that takes this debate back to the 1970's in the clashes of ideology between what Milton Friedman says a company's main purpose is versus the contrasting "school of thought" that emerged in the 1970's at Stanford of "Stakeholder Capitalism".
???? Ayudo a Fintechs a Maximizar Rentabilidad e Inclusión Financiera | Experto en Análisis Financiero y Gestión de Liquidez | Transformemos Juntos tu Empresa.
2 年Guadalupe Esquivel