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When House Republicans return from recess, much of their focus will center around ESG (environment, social and governance). In particular, they will be seeking ways to reverse the trends of companies using ESG to guide their corporate policies and decision making.
Straight Arrow News contributor Peter Zeihan thinks given the changes within the American political system, now is actually a good time for businesses to consider employing some form of ESG principles–but it will take years before they get it right.
Excerpted from Peter’s July 3 “Zeihan on Geopolitics” newsletter:
What are my thoughts on Environmental, Social, and Governance (ESG)? It is the idea that business has a role in pushing society towards certain norms and positive outcomes regarding environmental and social issues. We must look at what ESG should be, what it is, and what it is not.
What ESG should be…Until now, American business has played a minimal role in the political system. With the American political system in flux, it is only natural that companies would reevaluate their place in society and create policies that align with the ESG mission.
What ESG is today…The new policies businesses implement can be equated to attempting to climb Mt. Everest before ever learning to walk. Without benchmarks or industry standards, these companies can’t even make it Everest base camp; this process will be long and iterative.
What ESG is not…It isn’t a global conspiracy to destroy the US economy. When Elton John gets invited to a week-long confab in the Alps, you know the WEF isn’t plotting with the Illuminati…they’re just partying.
To this point, most ESG has been influenced by activists pushing policy from the outside OR activist investors making policy from within. The international stage doesn’t have much say, making ESG a domestic conversation of politics and culture.
