There’s no question that investors are increasingly examining companies through the lens of non-financial factors. It stands to reason that businesses without ESG concern do nothing to attract employees wanting to make a positive difference in the world through their work.
Yet, ESG responsibility is exactly that: a responsibility, shared by organizations, to “do the right thing well.” ESG concern framed as a business commonality may not be far from the truth, according to the article posted below.
A recent study created by the Wall Street Journal warns against the risks of looking at environmental, social, and corporate governance factors as a platform to help your corporation stand out from the crowd. Among 886 large publicly-traded companies scored on metrics like innovation and customer satisfaction, social responsibility had the lowest deviation score of 50 points (innovation scored the highest at 99.4 points). In other words, the tightness in scoring between companies concerning CSR demonstrates that the most influential organizations have yet to find ways to stand out among others in this arena.
There are multiple factors that cause nuances in the way ESG is measured – for instance, ESG trackers are highly process-based rather than performance-based – but the figure is still astounding.
We’ve taken some time to think about the implications of this study, and we believe that this metric is soon to change. With the right processes and tools, ESG initiatives can make an impact and help your business stand out. Ideascape can help. Message Jonathan Dyke or Deon Gaines to talk through your approach to social responsibility today.