Futures

The Call for a New, Focused ESG: Prioritizing Employees, Society, and Government, (from page 20221002.)

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Summary

The text discusses the evolution of Environmental, Social, and Governance (ESG) criteria, arguing for a new, more focused ESG that emphasizes measurable outcomes related to Employees, Society, and Government. Traditional ESG often lacks clarity and is viewed as a checkbox for companies rather than a strategic advantage. The author highlights the importance of ensuring employee well-being, understanding societal impacts, and engaging responsibly with government, especially in light of recent crises like COVID-19. The text calls for companies to recognize their role in society and balance profitability with positive contributions, suggesting a shift in corporate mindset towards accountability and purpose-driven actions.

Signals

name description change 10-year driving-force relevancy
Shift towards measurable ESG Emerging focus on quantifiable ESG metrics instead of vague goals. From vague ESG goals to specific, measurable criteria for employee, societal, and governmental impact. In 10 years, ESG criteria will be standardized and measurable, influencing corporate strategies globally. Growing pressure from consumers and investors for accountability and transparency in corporate ESG practices. 4
Employee-centric corporate strategy Increased emphasis on employee welfare and security in corporate strategies. From treating employees as costs to recognizing them as valuable assets. Companies will prioritize employee well-being, leading to enhanced loyalty and productivity. The Great Resignation and ‘Quiet Quitting’ highlight workers’ needs for engagement and support. 5
Societal accountability for corporations Companies are increasingly held accountable for their societal impacts. From minimal societal consideration to integrating societal impacts into business strategies. Corporate decisions will be evaluated based on their societal implications, enhancing corporate responsibility. Social media and connectivity amplify public scrutiny, pushing companies to act responsibly. 4
Government’s role in business ethics Recognition of government’s importance in corporate governance and accountability. Shift from viewing government as an obstacle to seeing it as a crucial partner in societal health. Companies will engage more constructively with governments to ensure public good and infrastructure support. COVID-19 revealed the critical role of government in society and business operations. 3
Focus on corporate transparency A growing demand for transparency in corporate actions and their societal effects. From opaque corporate practices to transparent reporting on societal impact and governance. Companies will adopt transparent practices that build trust with stakeholders and communities. Consumer demand for transparency and ethical practices is reshaping corporate behavior. 4

Concerns

name description relevancy
Clarification of New ESG The new ESG lacks detailed actionable steps on its impact on society, which could lead to accountability issues for companies. 4
Employee Wellbeing Companies may fail to prioritize employee well-being, resulting in decreased morale, increased turnover, and potential financial loss. 5
Societal Impact Businesses might overlook the negative societal impacts of their operations, leading to harm rather than benefit to the community. 5
Government Relations A disconnect between businesses and government can undermine public services and infrastructure, affecting long-term societal health. 4
Environmental Accountability Companies may exploit natural resources without accountability, leading to environmental degradation and sustainability challenges. 5
Corporate Purpose vs. Profit Conflicts between a company’s purpose and profit motives can lead to unethical practices and stakeholder distrust. 4

Behaviors

name description relevancy
Focused ESG A shift towards a more measurable and stakeholder-aligned ESG framework that emphasizes employee, society, and government relationships. 5
Employee-Centric Approach Companies are increasingly recognizing the importance of employee well-being and development as critical assets for success. 5
Society Operating Systems Companies are evolving into entities that must consider their impact on society, not just profitability. 4
Accountability in Governance Enhanced focus on the role of government and the necessity for corporate accountability in supporting public resources. 4
Integration of Purpose and Values Businesses are expected to align their operations with purpose and values that address employee, societal, and environmental concerns. 5
Sustainability Mindset Emerging expectation for companies to balance their resource extraction with ecological sustainability, potentially termed ‘Earth Tax’. 4
Generational Shift in Expectations Younger employees are driving a demand for companies to prioritize purpose, values, and fairness in their operations. 5
Holistic Impact Assessment A call for companies to evaluate both positive and negative societal impacts of their products and services. 4

Technologies

description relevancy src
A more focused and measurable approach to Environmental, Social, and Governance criteria that emphasizes stakeholder value and societal impact. 4 022335f24a4ab2580a4b1fb2dbb53fac
The concept that major tech companies function as Society Operating Systems, influencing societal structures and requiring governance aligned with social responsibilities. 4 022335f24a4ab2580a4b1fb2dbb53fac
A proposed accountability measure for companies to ensure they do not extract more from the earth than can be regenerated, promoting sustainability. 3 022335f24a4ab2580a4b1fb2dbb53fac

Issues

name description relevancy
Redefining ESG metrics A shift towards a more focused and measurable ESG framework that aligns with stakeholder value and recent challenges. 4
Employee well-being and security An increasing emphasis on ensuring employee security, diversity, mental health, and skill development as critical business assets. 5
Corporate impact on society Recognition of the significant influence businesses have on societal well-being and the need for accountability in corporate actions. 4
Government-business relationship The evolving dynamics between corporations and government, highlighting the necessity for better governance and corporate responsibility. 4
Societal Operating Systems The concept that major corporations act as societal operating systems and must manage their societal impact consciously. 3
Earth Tax concept The idea of imposing a responsibility on companies to not extract more from the earth than can be regenerated, akin to an ‘Earth Tax’. 3