![]() ![]() In other words, companies should do what’s right because it’s right, not only because it’s good for business. The Business Roundtable, the leading advocacy group for American corporations, broke with decades of tradition in 2019, stating for the first time that businesses must serve all stakeholders - not just shareholders - ethically, morally and fairly. Where staying “woke” once meant being alert to societal injustices, conservatives often wield the term now as a cudgel to disparage progressive ideas regarding race, gender and the environment.Īgainst that cultural and political backdrop, it’s become somewhat radical to suggest that companies should do the right thing simply because it’s the right thing to do.īut just two years ago, the leaders of Corporate America did just that. Part of the problem is the way the term, which originates in Black American English, has been appropriated by White conservatives. Elon Musk, despite running a massively successful electric car company, has also decried “wokeness” as a “false virtue.” But also, let’s think about your broader impact on the world.’” ![]() ![]() “Sustainable investing…is trying to improve companies by saying, ‘Hey, take care of your ESG-related issues that investors used to not really prod you to do. “It’s a little bit of both,” says Jon Hale, the head of sustainability research for the Americas at Morningstar. The messaging around ESG comes down to this: Is doing the right thing valuable in and of itself, or only if it helps the bottom line? And governance encompasses how a company comports itself on such matters as executive pay, shareholder rights, leadership and even its own internal controls. The social aspect concerns companies’ relationships with employees, suppliers and customers – not just stockholders. To be sure, Fink, whose firm has more than $10 trillion in assets under management, isn’t wrong: Studies show that companies with strong environmental, social, and governance norms tend to perform better financially over the long term.ĮSG, or socially responsible investing, is a new lens through which companies can be evaluated by assessing them on non-financial metrics, such as their impact on the environment (the “E” in ESG). Translation: Don’t be angered by this do-gooder approach, Wall Street - this is just what’s good for business. “It is not a social or ideological agenda,” he wrote in his closely watched annual letter to clients. This week, when BlackRock CEO Larry Fink defended his firm’s efforts to hold companies accountable for their environmental and social impact, he included a nod to his critics who’ve accused him of forcing a liberal agenda on businesses. But some CEOs are wearing their non-wokeness as a badge of honor. “Woke” probably isn’t the first adjective that comes to mind when describing Corporate America. ![]()
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