Rethinking the S in ESG: the second half of the sustainability game

Sustainability is a game of two halves. In the first, the goal is to raise collective awareness through advocacy and environmental evangelism, making the highest number of people fully conscious of the importance of a sustainable future. The objectives of the first half of the game have shaped the early nature of the concept of sustainability: green and shallow. Sustainability metrics exactly mirrored these features.

Towards a new balance in the ESG grammar

Looking back at the recent past of the ESG, we can see a huge E and two smaller letters, the S and the G. The reasons are clear. First, the E is much easier to measure; second, and most importantly, in the realm of E keeping profit and purpose aligned is a simpler task than pursuing social objectives without endangering shareholders’ dividends.

The easy and shallow approach to sustainability means that financial players and large corporations have carefully dodged any kind of profit-purpose tension.They have achieved this by means of two strategies: either engaging in negligible initiatives of corporate social responsibility or cherry-picking sustainability objectives that don’t require any trade-off between profit and purpose. This resulted in an overwhelming prevalence of green narratives and environmentally related goals, with crucial social objectives being overlooked. The price for such imbalance has become evident only recently: the politicisation of ESG and the slowing down of the green transition due to emerging social tensions. There follows an imperative necessity to bring the letter S back to the centre of the debate.

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