Failing Impact Acronyms: ESG. CSR. UNPRI & More

Invisible Imprints by Asher Jay

What should a corporation’s obligation to society and to this finite biosphere be? How should an entity with far reaching consequences and costs to society and the environment, often both locally and globally, evidence integrity and accountability? What should the landscape of corporate philanthropy and impact initiatives look like? There are plenty of polarising opinions, but few insights into how a company should be ideating, implementing, integrating, executing, and realising meaningful, lasting, positive change in the world.

I will preface this piece by admitting to the following: I am an entrepreneur. I am a consumer. I do not think I can wake up tomorrow and make every item I need with raw ingredients and still run my startup, for example make my toothpaste, laundry detergent, cleaning agents etc., and still manage my daily workload. I work from 9 am to midnight almost daily, including weekends. I get that a business needs to make revenue, make profit to sustain itself, to scale and reach more customers who could benefit from access to its products. A business needs to be viable. I do not think corporations are evil, but I also don’t believe they are the gods free market makes them out to be. I usually look for the center, for the modulated, mindful approach. I think businesses are full of people who care and want to make a positive difference. I know a business can be run ethically, inclusively, transparently and with integrity. I also recognise we live in a culture of fear, trolling, cancellations and public shaming. This makes institutions, brands, and individuals cling to their known shores more, shy away from the unfamiliar and innovate less. However, we cannot do what has been done thus far and expect to address the cumulative and compounding social and ecological concerns of our time.

For those who are not in the corporate impact space and do not know all the frameworks and entities that were established and convened under lofty, unintuitive acronyms, not to worry, I am going to run through the lengthy roster now. Most of these standards and organisations were created solely to verify and certify corporations were proactively disclosing their non-financial liabilities to their investor and shareholder base. Objective third party auditing efforts, seem to have a way of multiplying instead of consolidating. Additionally, when we have no real diversity of representation in this space, there will be no real attempt to challenge prevailing perspectives, policies or proposals. We will never consider breaking away from what has been and continues to be the way we effect impact, because we do not assimilate countervailing methodologies, or question how we measure, why we measure, what we need to prioritise given global and local crises. Instead we will insipidly, and complacently repeat what does not work by creating even more standards and organisations.

Frequently, the governing paradigm, makes the mistake of leaving the deployment of the solution in the hands of the perpetrators, it’s why British Petroleum (BP) got away with dumping dispersant in the Gulf of Mexico. Tragically those who benefit from the current extractive, consumptive, divisive, inequitable paradigm, are the ones in charge of shaping the policies, coalescing partnerships, brokering deals and breaking promises worldwide. This way they get to do just enough to give hope, but they also confine its expression to being merely an ideology, as they ensure it never quite translates in a timely manner into critically needed outcomes. That would change the status quo, that would shift the axis of power and wealth. So no matter what things only move just enough to continue feeling eerily familiar, business as usual. This is precisely what the SAG-AFTRA writers and actors are on strike for, and why Bob Iger CEO of Disney makes $74,175 per day while the writers make $69,510 a year! With all this in mind, let’s get back to the many frameworks and organisations in rotation that assure us of a better tomorrow that will never find fruition today.

We commence with the ISO 14000 (International Standard for an effective Environmental Management System Framework) followed by the EMAS (ECO management and Audit Scheme) coined by the EU (European Union). GHG (Greenhouse Gas Protocol) which works in partnership with WRI (World Resources Institute) and WBCSD (World Business Council for Sustainable Development), however the obsession to “measure what matters” did not stop there.The FSB (Financial Stability Board) launched the TCFD (Task Force for Climate-Related Financial Disclosures) because corporations and capital markets needed yet more entities telling them how to be ethical, accountable and forthcoming. To assure labor standards, OHSAS 18001 was formed (Occupational Health and Safety Assessment Series) which was replaced by ISO 45001. Next, to ensure fair working conditions both within the company and at supplier organisations the SAI (Social Accountability International) gave rise to SA 8000 (Social Accountability Standard), which was followed by the Fairtrade Mark in Germany that intended to protect producers.

Then we have GRI (Global Reporting Initiative), forged to help companies “increase accountability and transparency in their contribution to sustainable development.” After GRI’s launch, CERES (Coalition for Environmentally Responsible Economies) and the Tellus Institute joined forces with UNEP (UN Environmental Program) to launch SRG (Sustainability Reporting Guidelines). SASB (Sustainability Accounting Standards Board) is qualified as being complementary to GRI, as it “improves efficiency in financial reporting of sustainability information.” Around the same time, the UN Global Compact institutionalised CSR (Corporate Social Responsibility), which led to ESG (Environmental Social Governance) being officially drafted. SASB mapped an industry specific classification system known as SICS (Sustainable Industry Classification System) to highlight differences in ESG facets between businesses from dissimilar sectors. IMP (Impact Management Project) consolidates metrics around environmental and social concerns. CRD (Corporate Reporting Dialogue) was coined by BSBS (Bloomberg Sustainable Business Summit), convened by IIRC (International Integrated Reporting Council) and is comprised of CDP (Carbon Disclosure Project) CDSB (Climate Disclosure Standards Board), FASB (Financial Accounting Standards Board) GRI, IASB (International Accounting Standards Board), ISO, and SASB. Whoever said too many cooks spoil the alphabet soup was clearly mistaken, because what the world needs most is not economic equity, racial justice, biodiversity preservation, or swift, scalable climate action, what we actually need is more administrative agencies, standards, frameworks, evaluation tools and bureaucratic leadership. We also desperately need more conferences to jet set to and evidence a superficial show of solidarity at, all so corporations riddled with disconnects and their oblivious babysitters can continue to put lipstick on a pig.

More? The UNPRI (Principles for Responsible Investing) was established to advance the acceptance, adoption, and application of ESG in the analysis and decision making around the $30 Trillion dollars in assets under management of its 1000 signatories. MDGs (Millennium Development Goals) evolved into the SDGs (Sustainable Development Goals) and they promised to “Transform our world” with lots of hype around a 2030 agenda for Sustainable Development. Everyone got a pin. The pin was later produced in wood. The branding was impeccable, and even those who do not to support LGBTQ and admonish the rainbow proudly sport this multicoloured pin on their suit’s lapel. The SDG forum took it one step further and began establishing club houses for its broadscope rhetoric in the form of Goals house. Soho House for impact. We also worked ourselves into a tizzy over the UNCCC (UN climate Change Conferences) in adherence to UNFCCC (United Nations Framework Convention on Climate Change) colloquially known as the Paris Agreement, that brought governments together on a ratified piece of paper to help them fail collectively at delivering on data informed, urgently needed actions. UNFCCC also populates COP (Conference of Parties) that delegates, investors, brands, advocates, journalists, artists, creative agencies and even “woke” celebrities attend year after year. I attended COP16 and haven’t been to one since. But let’s keep calm and carry on, shall we? Perhaps in the words of Greta Thunberg, we should rename these conferences, “Blah Blah Blah” and year over year evolve the branding as follows: Blahx3, Bx3, BCubed, BtothePowerOf etc, it’s still the same blah, but with a numerical formula in its title that gives it that hint of sophistication and splash of seriousness.”

Every conference and awards event I have attended this year including the Time100Summit has left me feeling more jaded and uninspired by the entire landscape of political and private enterprise will in the impact engagement arena. Must highlight that the UN’s many agencies, councils and committees are merely meant to facilitate the coming together of countries around social, ecological, economic and political objectives, but they cannot endorse, advocate for or coerce any solution set or agenda, even if is is backed by science and the problem requires immediate redress. This means ambassadors, influencers and representatives leave colossal travel footprints to get to these UN gatherings, only to do the bare minimum at each event, because the slow moving process entails presenting all available recourses to members and allowing each member country to pick which ones they would care to voluntarily opt into… as if urgent ecological and social crises are line items on a Chinese menu. We’ll take №2030 to go, but light on the legislation please, and could we get a comforting side of patriarchal, capitalistic, hegemony with a liberal seasoning of big oil interests with that? The most startling thing a senior delegate at an UN event told me was, “I am just here for the bar. I have been in this for too long to believe we are going to do anything meaningful, now I am just a wandering alcoholic.” This made me laugh out loud, but also feel absolutely devasted. We can and must do better by what remains and is worth preserving for generations to come. I refuse to resign myself to hopelessness because there is a lot that can be done now given what we know from all that which we have done wrong and poorly.

CSV, (Creating Shared Value) was birthed to remind corporations they had a social and regional context, because spelling out the obvious was the only way to rein in a company’s unabashed affinity for recidivism. GIIN (Global Impact Investment Network) coined to assuage investor demands to profit, not prosper, from ESG. GIIN developed IRIS+, yet another impact measurement and management system that measures social, environmental, and financial performance. We have such a deluge of ESG measurement tools, software applications, and auditing firms that I am not going to squander another paragraph on names, but the major players are Morningstar, Bloomberg, Moody’s. Now we have the word purpose being thrown around like the last roll of toilet paper in a public restroom by everyone in the impact space. Purpose like CSR tends to be more qualitative, and thus some decided to link it back to the flawed yet quantifiable blueprint of ESG. This enabled a new wave of impact-hustlers to launch more scoring models that use the same vernacular and building blocks, E, S, and G, while assuring clients of how groundbreaking this new premise is, as it’s under the novel signature of ESGP (ESG plus Purpose). These days everyone and their cousin is moonlighting as an impact conduit, champion, or computational appraiser.

What is Corporate Purpose you ask? It’s not their mission, vision or philosophy, it’s what brands deliver on beyond their pursuit of profit. Purpose allegedly decanters with robust promise, as a higher calling, when impact commitments and actions are poured through existing failing institutional constructs riddled with useless middlemen claiming to be impact multipliers and amplifiers. The flavour profile is surprisingly similar to CSR, but it claims to infuse the impact palate with raison d’etre, French for knowing one’s “why.” It seems since the Gilded Age in the United States (1870–1900) when social welfare policies first began to emerge to 2023, CSR asked “why,” but stopped its enquiry, rather honestly, at profit and as a strategy to prevent unionisation of workers and worker strikes. Not because the companies wanted to be fair, but because they didn’t want to endure inefficiency and disruptions to their assembly line. CSR essentially took its thinking and feeling hats off at “short term goals” and “greed.” Why has it taken corporations over a century of fabricating abbreviated labels to even peel back the impact onion down to knowing “why,” they should care about the social and environmental contexts they occupy? Wonder how many more acronyms it will take for industry to exercise common sense and compassion.

With such an inundation of data, numbers, financial and qualitative disclosures what have we palpably achieved for people and planet? How much money, energy and time have we sunk into establishing all these frameworks and regulatory bodies that act as indispensable pathways under the guise of providing checks and balances, profiteering off the notion of doing good, while never actually making good on the doing. Not one of these frameworks help a corporate entity attain self-sufficiency, if they did, they would be out of a job, and where’s the money in that? Corporations and capital markets cannot be expected to do good when they are not built to emulate, enhance, and engage the living world, which they belong to whether they care to acknowledge reality or not. Nature is self-contained, regenerative, and autopoietic, none of these anthropogenic entities are, and this foundational dissonance cannot be offset in postscript. The system that persists must be levelled, so we can lay a new foundation, as this whole framework is rotten at its core. That which does not embody the cyclical, renewing processes of life cannot ever be a part of its reconciled expression without pilfering its integrity and resilience. All we have crafted are expensive Band-aids for internal bleeds that have been diagnosed accurately by scientists worldwide and dismissed by those with the money and power to enact cures.

What will it take for corporate brands to evidence greater stewardship of their own accord because constant supervision and surveillance from all these rational, empirical babysitters hasn’t made a dent anyway. Why are so many entities needed to encourage corporations and capital markets to do the right thing? Why are so many externalities informing the internal alignment of a corporation? Why do brands not know their sense of place in a finite, tangible planet, rich in living beings both human and wild that they harness and harvest from to produce their goods and services? How is context not self-evident? Why are the vast majority of companies still behaving ignorantly? Why aren’t the companies doing the right thing properly not overthrowing a system that continues to condescend and deem them inept at self-integrity? Why aren’t the necessary changes that would allow an organisation to stand tall, being prioritised?

There are more minds writing about Larry Fink denouncing the acronym “ESG” at BlackRock, because impact semantics cost his investment firm clients from the the privileged political right, than there are informed, incisive, and inclusive discourses around the validity and viability of any ESG framework. Worse still, Black Rock just elected Amin H. Nasser to its Board of Directors, President and CEO of the Saudi Arabian Oil Company, Aramco. Bill McKibben posted, “ BlackRock chooses the hottest month in human history to name the CEO of the biggest oil company on earth to its board. For all their greenwashing, they clearly care nothing about our future.” This should come as no surprise and should underscore that ESG never meant anything to Larry Fink. It should also make every financial firm and corporation that truly wants to have real positive environmental and social impact extremely skeptical of ESG’s and SASB’s validity, as it is greenwashing by association.

ESG cannot be conflated with sustainability, or real positive impact, as the reductive term does not set the stage for a corporation to be a part of any social and/or environmental context, rather it clearly delineates the company as apart from both. ESG then discerns how the company can exploit each aspect subversively to maximise shareholder value, generate profits, and increase market opportunities while mitigating, manipulating and managing risk exposure brought on by the company’s unethical practices, amoral blind spots and ill-considered impact initiatives. Investors are hedging their bets, corporations are covering their vulnerabilities and liabilities, and no one is delivering on social and environmental solutions. How do they fail to cognise how myopic it is to center impact around self-preservation? To only care if it pertains to the brand’s needs and desires, is selfish and small. ESG deliberately fragments social and environmental contexts, as creating those fractures allows corporations and capital markets to garner profit and amass power without due recognition to the eroding interdependent networks that subsidise and absorb the costs, whether those are communities or thriving ecosystems. It’s why biodiversity loss did not factor in until 2022–2023. We have lost 70% of global biodiversity, and now corporations and capital markets are willing to account for what remains without ever assuming responsibility for the irreversible damage and loss they have caused to the natural world thus far? The unaffordable consequence and cost of their prior apathy is forever an externality on their balance sheets and metrics. It would be laughable if it weren’t so apocalyptic.

The lens of ESG frames a company’s concern for planet and people subjectively around its own survival and self-interest, consequently, these constructs inherently curtail comprehensive, cohesive, problem solving, because solving the problem would likely put them out of the job they know and have. To be adaptive and evolve with the times would mean having to embrace the unknown and the unfamiliar at an unprecedented rate, it means choosing to have the uncomfortable conversation before its forced upon your company. I cannot even get brands to have an uncomfortable private conversation with me or remove unnecessary middlemen from the conference calls, because they are so defensive and afraid to change things up and make the strides needed to effect meaningful change. I received one correspondence that said, “We get what you mean, but we have always done things this way, and we feel safe going back to our known partners.” Even if they bring no value add? Even if it means churning out more of the same half-baked impact outcomes? Even if it squanders money, time and energy on redundancies and incompetence?

ESG criteria are not the only problem. ESG awards and certifications are equally culpable for greenwashing. For instance, 1. startups repurposing post-waste plastics as building materials often get lauded for their commitment to sustainability, but data shows that the compositional clarity, stability and integrity of post-use plastic waste is often not known, disclosed or viable. Soft additives that impart the many characteristics that make plastics desirable as a building material have been shown to leach more toxins, volatile compounds and shed more micro-plastics in their recycled state than in their original fabrication, which poses adverse health risks to people living in these plastic dwellings (often those who belong to lower income families or are refugees and cannot afford a healthier abode for themselves). Similarly, many apparel manufacturers repurposing marine plastic debris into thread, textile and ready-to-wear, fail to resolve or address their material shed rates throughout the lifecycle of the fabric or garment, which results in more micro and nano plastic fibres accumulating in the ocean. “It is estimated, 640,000 to 1,500,000 plastic microfiber pieces are shed per wash cycle.” The solutions being commended for their commitment to sustainability at times worsen the problem, instead of making it better, and this makes not only the product solution an act of greenwashing, but the award forums and applauding audiences complicit in the crime too.

To do only what is necessary to protect and grow a company’s market share, reputation, bottomline, resiliency and investor returns was never going to work in favour of people and planet. It is impossible for a part to account for the whole when it fails to grasp its role in the whole. To only care to the extent the outcomes affect the company’s operations, social currency, resource needs, revenue streams and regional regulatory compliance demands, is to stilt the transformative power true conviction, character and courage can shape in the world. Alas, to stand for something bigger, a brand has to either set itself aside from time to time or expand itself intentionally to exemplify its whole which consists of its stakeholders, its social and environmental context, its investors and enterprise (self.) At present, a corporation’s impact landscape tends to be grievously compartmentalised with sparse osmosis of information, personnel, ideas, and expertise occurring throughout its impact initiatives’ lifecycles, both within the company and with its external stakeholders.

How can brands do better? First, they can have the courage to scrap the efforts that do not take their whole context into account. Second, they can work confidentially and candidly with no BS experts (like Lola Bakare and me), who will always urge corporations to have the difficult conversations mindfully, transparently and proactively, instead of having it thrust upon the organisation by the court of public opinion after having sunk a lot of resources in the purpose-washing direction. Thirdly admit to your transgressions, assume responsibility and take remedial action to course-correct, do not wait to get sued or held accountable by consumer outrage, scientific data, and nonprofit petitions to do the honourable thing. Do not procrastinate making the right changes for regenerative reasons. Opacity, ignorance, negligence, apathy and dishonesty cost brands an erosion of share value by 3–14% (Journal of Business Ethics Vol. 128), a 96% precipitous drop in consumer trust in brand communications and credibility (American Association of Advertising Agencies Study) and $3 Million-25 Billion in FTC claims and damages. No one wins in that scenario.

Follow up articles will focus on how many brands commit the same mistake around the same time window and fail to learn from each other, and what these brands could have done to spare themselves of their respective negative consequences.