Ahead of Earth Day on Tuesday, some thoughts on recent developments around ESG.
When I criticize various sustainability policies or proposals, the response I often get is along the lines of 'well, at least we are trying.' To which I reply along the lines of 'well, good intentions do not substitute for good outcomes.' My general thought is that, kidding ourselves we are making progress is no help to anyone – if anything, it lulls everyone into a false sense of security through the illusion of progress, and that is a problem because it ensures even less progress than if we were sufficiently self-aware to know we were not really moving the needle.
The evolution of the resistance to ESG in the U.S., as reported in the article in the url below, demonstrates the danger of relying on good intentions. ESG, from the beginning, was clearly based on false assumptions and inconsistent logic, topped off with the desire to start making money as soon as possible. This could have continued for a while, except that the fragile intellectual foundation (characterized by incomplete definitions and inconsistent measurement) allowed ideological opponents to pick it apart. If ESG had rested on a sounder foundation, the ridiculous ideological attacks against it would have fallen flat. But, because ESG is inherently flawed, it was easy for those opposed to cherry-pick the flaws that best matched their arguments, to make their pushback sound more legitimate, even in the face of economic gain:
"Climate investors have warned the political right is winning a war against ESG investing. A recent poll shows American support for renewable energy and electric vehicles is fading. And yet, President Joe Biden's signature climate law is in many ways benefiting conservative red states the most."
I have said this many times, but I'll repeat for good measure – in my opinion, as a society, we are not serious about tackling climate change. In fact, I would go as far as to say that we have not even begun a conversation about planning how we might be serious at some distant point – as noted by Tad DeLay, quoted in the article in the second url below:
"Just by driving to get groceries you emit carbon dioxide … a fifth of [which] … will still be in the air in 500,000 years, killing species that haven't yet evolved."
You would think we would take all of this a little bit more seriously. All you have to do is realize that during the COVID lockdown, when none of us were going anywhere and the global economy had virtually shuttered, global carbon emissions dropped a mere 6% (see Strategic CSR – COVID-19). 6%! And we think we can get to net zero by 2050. It would be laughable if the implications of our self-delusion were not so serious.
Tackling climate change and creating the conditions for a more sustainable economic system will always require plenty of unconditional cheerleaders, not to mention brilliant minds who will innovate and provide encouragement along the way. It will also require those who can think critically about what we are doing, and work to prevent us from lulling into the false sense of security that is just as big a barrier to progress as sticking our collective heads in the sand.
Take care
David
David Chandler
© Sage Publications, 2023
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Climate Investors Warn the Right Is Winning the Way on ESG
By Alastair Marsh
February 28, 2024
Bloomberg
'What if there just is no solution?' How we are all in denial about the climate crisis
By Maya Goodfellow
June 20, 2024
The Guardian
