27 May 2022
Beyond ESG: An Integrated Approach to Governance, Investing & Regulation
“Time for a Name Change” is the title of a thought-provoking article posted recently on LinkedIn by Stephen Davis, Senior Fellow and Associate Director at Harvard Law School’s Program on Corporate Governance. Davis argues that the acronym “ESG” has outlived its usefulness and needs to be replaced. Writing largely from the viewpoint of investment professionals, he suggests a new term: “360-degree investing.”
I agree with Davis that a new term to replace ESG is urgently needed. But while “360-degree investing” works for asset managers, it does not work for companies. Even so, Davis’s key point makes sense – “ensuring that both investors and companies take account of risks and opportunities that lie outside conventional accounting.”
To replace “ESG” for companies as well as investors I would propose use of the already familiar term “integrated.” One of the dictionary definitions of integrated is: with two or more things combined in order to become more effective. Applied to evaluating business enterprises, an integrated approach could effectively combine environmental, social and governance considerations together with traditional financial and accounting metrics.
Download John's full article below.
I agree with Davis that a new term to replace ESG is urgently needed. But while “360-degree investing” works for asset managers, it does not work for companies. Even so, Davis’s key point makes sense – “ensuring that both investors and companies take account of risks and opportunities that lie outside conventional accounting.”
To replace “ESG” for companies as well as investors I would propose use of the already familiar term “integrated.” One of the dictionary definitions of integrated is: with two or more things combined in order to become more effective. Applied to evaluating business enterprises, an integrated approach could effectively combine environmental, social and governance considerations together with traditional financial and accounting metrics.
Download John's full article below.
