Sustainability Grows Up: From Aspiration to Accountability
The discussion around corporate environmental, social, and governance (ESG) efforts and disclosures is often shaped — in fact, distorted — by high-profile announcements from large institutional investors or gossipy sustainability grades from proxy advisory firms.
In the glare of these spotlights, it is understandable that companies will respond in kind, issuing glossy corporate social responsibility reports proclaiming high-minded objectives, from sustainability, to diversity, to transparency. The legitimate purpose of ESG inquiry, however, is not to set off a virtue arms-race, but rather to understand how prepared a company is to manage the business risks it faces. Fundamentally, ESG analysis is all about threat assessment.
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