Environmental, social, and corporate governance (ESG) goals are must-haves for today’s companies. However, there is a risk in over-reliance on meeting ESG goals without taking into account global politics and other contributing information. Gillian Tett, Editor-at-Large, U.S., and Chair of the Editorial Board for the Financial Times, explained the need to approach ESG through the lens of a cultural anthropologist, exploring the larger context beyond the occasional tunnel vision on narrowly-defined goals. Understanding the world requires a desire to explore the world and its cultures, empathy, and a curiosity about how others operate.
ESG ratings, explained Steven Fox, Founder & CEO of Veracity Worldwide, LLC, can create information gaps through an overreliance on self disclosure. This may lead to a focus on policy over practice, lack of local content, and flaws in corporate governance. Local context is critical because goals may be unique to given jurisdictions. Attentiveness to ESG goals has gone from cursory to meaningful engagement, and now to actual change.
Through lateral vision, a wider sense of impact is possible. The zeitgeist is changing, Tett reminded the audience. Companies are embracing ESG as an approach to risk management rather than an activist-driven add-on. Squaring the balance between goals will be an increased focus for future-looking companies.
While conventional ESG ratings are important, they create information gaps and those in turn leave businesses exposed.
Steven Fox
The world needs a second AI—anthropology intelligence—to have that human sense of checks and balances, that sense of common sense.
Gillian Tett
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