In mid 2021, a friend who runs a software company in London emailed me to ask for advice on ESG. While I was aware of the concept, I had to admit that I didn’t really know much about it. His response?
“In the land of the blind, the one-eyed man is king.”
Intrigued, I spent the next few months tapping my network to learn what I could. What I found shocked me.
Inconsistent standards and policies, which no one knew or understood, and which stand little chance of accomplishing clear boundaries and internal cohesion;
A rulemaking and policy environment with
veryVERY high stakes, because so many people stand to gain from it, while the average business trying to comply loses, no matter what;An organizing framework which makes little sense (NetZero by 2050) and which—even if accomplished—won’t really make the world a better place;
Ridiculously high compliance costs combined with cumbersome procedures makes ESG nonsensical for the average entrepreneur;
A blind acceptance of technocratic solutions (carbon trading, carbon storage and more), without questioning whether there are better, more impactful, solutions;
Downright horrible advice from the Big Four accounting firms, designed to earn them fees and NOT solve the climate challenge;
A tsunami of information from self-proclaimed ESG experts, all of whom promote Business-as-Usual, with a few ludicrous tweaks to emissions levels;
But worst of all, not a single person could show me how their frenetic activity would have any impact on climate change, either on a micro- or macro-scale.
I wrote back to my friend, saying that the blind men he referred to are all trying to identify the elephant from their limited perspective. All of them miss the point.
(If you’re not familiar with the parable of the blind men and the elephant, here’s a 4min video.)
He then challenged me by asking, “Well, what is the point?”
Little did I know how deep the rabbit hole to that little question would lead…
Fast-forward to today (and hundreds, if not thousands of research and policy papers later), we now have a relatively sound set of organizing principles to answer his question.1
The good news is that his board is close to ratifying their (significantly refined) ESG strategy. This new strategy is far less onerous from a reporting perspective AND their company is now demonstrably “making the world a better place.”
The bad news is that the process took much longer than expected. That’s because we had to bungle our way through a very steep learning curve. It took us a long time to fully understand ESG, climate science and NetZero. Once we understood these complex topics, we had to get everyone on board to unlearn everything they thought they understood.
So, that’s the reason we’re launching Conscious ESG. We’ve learnt a ton and have a sense that (a very small percentage of) business leaders are sufficiently conscious to question the ESG status quo. We believe we can provide pointers, ideas and guidance to these brave individuals.
We don’t necessarily have rock solid answers. What we do have is a working hypothesis, which replaces the idea of the dogma or the doctrine of ESG as it currently stands. Our intention is not to stoically stick to our ideas come what may. We do not want to risk the martyrdom of others, purely because of the strength of our conviction. But we do want to question and test our hypothesis with you and others. This, after all, is the hallmark of the essential ethical nature of scientific activity: a constant questioning of the results of our work.
This is why we say on our About page that Conscious ESG is not for everyone. It is only for business leaders who are willing to question the feasibility of ESG. We know you are one of them, and we welcome you into the fold of business leaders willing to take a stand against the nonsensical ESG framework.
In a nutshell, the point is this: Milton Friedman declared in 1970 that “the social responsibility of business is to increase its profits.” Some business leaders today—fifty years later—are ready to acknowledge the limiting, short-term thinking Milton’s position represents. After seeing the benefits of addressing ESG holistically, these leaders are now—voluntarily—saying that “the social obligation of our business is to support a world that works for all.”