I’m pleased to post an original essay, Greenwish: The Wishful Thinking Undermining the Ambition of Sustainable Business, by Duncan Austin (available here). Duncan has been active in the sustainability field for 25 years, initially at an environmental NGO and then at a sustainable investment firm. This dual experience gives Duncan a unique insider perspective and he now researches and writes as an independent.
In the essay, he argues that the two-decade-old sustainable business movement has reached a major crossroads. On one hand, the sector seems to be thriving: a quarter (some say 50%) of global financial assets are now managed sustainably, and chief sustainability officers are common. Yet, in the real world, global environmental metrics continue to deteriorate. Global CO2 emissions are re-accelerating and the UN has just reported that ecosystem health is declining at rates unprecedented in human history.
How does Duncan explain the divergence of these trends? He proposes that ‘greenwish’ – the earnest hope that voluntary sustainability efforts are much closer to achieving the necessary change than they really are – is our sector’s key challenge today. Greenwish may, he says, be as problematic as it’s more cynical cousin, greenwash because it is much more widespread and fuelled by good intentions.
Without doubt, there has been a big increase in SRI (or ESG investing) over the last 20 years but it has also coincided with ever more rigorous application of SVM (shareholder value maximization). And as Duncan illustrates, SVM trumps SRI.
I started Preventable Surprises when I realized that investors are the primary enablers of dysfunctional corporate and market behaviour and that the ESG “project” as it has become commonly understood is not on track to change this. Duncan warns that unless the CSR/ESG industry acknowledges its limitations, it could divert energy from the only form of change – systemic policy change – that can now address our environmental challenges fast enough.
Raising a problem is useful but even more so when you show a way forward. Duncan believes that companies and investors who are genuinely “sustainability aware” will need to think less about what they can achieve alone and more about what might be done together. With systemically important mega investors failing to support the goals of collaborative initiatives like Climate Action 100, this is a very timely contribution.
It’s not a quick read but no one that I have shown it to has regretted the time they’ve spent engaging with these challenge this paper raises. Duncan (and I) would very much like to hear what you think, where his description aligns with you own experience and where it does not (either because things are better than he suggests or worse). And most important, how you think the ESG/CSR industry can make the pivot needed.
Preventable Surprises will be hosting a virtual dialogue to explore these and other questions and if you would like to be involved, please send your feedback. In case it needs saying, your views will of course be treated as fully confidential (Chatham House rule).
Email: [email protected]