I think we all can better if we work together, esp private sector with development institutions
Anti-ESG attacks in the US are already proving to be costly for taxpayers (see links below). Collectively highlighting how forcing investors to ignore risk is a fundamentally bad business practice that harms pensioners and costs taxpayers will help us emphasize that there is no widespread backing for these bizarre attempts to delay the inevitable transition to a decarbonized economy.
Examples of cost studies/coverage:
https://www.bloomberg.com/news/articles/2022-06-13/texas-s-wall-street-showdown-costing-cities-hundreds-of-millions
https://www.bloomberg.com/opinion/articles/2023-02-13/guess-who-loses-after-florida-and-texas-bar-wall-street-esg-banks?sref=gPAG2MJ8
Sorry, Asyl Undeland from the World Bank here
Not sure … there are enough of experts who now write for everything 
Significant international collaboration among policymakers, the financial industry, end-to-end investors, and other stakeholders who can assist in shaping ESG processes.
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The UN Special Representative to the Secretary General (UNSRSG) for Business and Human rights proposed a framework for business and human rights issues in 2011 and this was unanimously endorsed (first time) by the UN Security Council the same year. This was structured around the State duty to Protect human rights; the Corporate Responsibility to Respect human rights; and the Right to recourse for all stakeholders. Thee are current discussions surrounding the need to update the guidelines to consider the right to a healthy environment. In terms of climate change risks and impacts, all Equator Principles signatories are required to account for the climate change impacts from the projects where they provide support and therefore, this obviously requires clear lines of decision-making, communication and review (for each project) and so this would be significant (and potentially very complex if lots of actors involved) in light of fiduciary duty. (Apologies I am not a lawyer and so not sure that I have used the correct terminology here)
Encourage the corporate sector to leverage and lean on the vast amount of work, expertise, frameworks, and knowledge that already exists (and is being done as we speak) in the international development sector. The corporate sector appears to be trying to re-design something that has been part of civil society’s narrative for decades… and I am personally observing a lack of interest among friends in the corporate space to learn from a sector (international development) that is perceived to be inefficient and incapable. How might ensure that companies aren’t trying to re-invent theories of change and frameworks around “ESG” when there is so much work that has already been done (MDGs, SDGs, and the thousands of frameworks on equity/justice/poverty/etc)?
Maybe just my bias, and would love to be proven wrong here!
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In response to Katie’s question, European notions of “impact materiality” are contrary to the way materiality is conceptualized in the U.S. investors aren’t really allowed to consider impact materiality unless it redounds upon enterprise value. That is why systemic risk is key: it affects investor portfolios so should theoretically be material. It’s a new concept, however. The EU, and ISSB, don’t even acknowledge it. For collaborative purposes it would be really helpful if corporates and investors spoke with a unified voice about systemic risk, as the Business Commission to Tackle Inequality just has (thanks, CIC!): Flagship report - The Business Commission to Tackle Inequality
This is true in the US - not aware if the anti-ESG movement gaining traction in other parts of the world too. How do ESG practitioners toe this line in their respective companies? Are companies walking back on ESG language?
Absolutely by talking partnerships and collaboration is too loose a definition for what is required … Systems thinking a is Partnership+ model and we believe you need 2 other stakeholders for any eco-system to thrive - Entrepreneurs and Citizens … however we tend to stick to the Funder / donor - Implementer - Ground hierarchy that actuals does not do much to build trust or respect necessary for system-wide collaborations
Thanks for sharing. We need to standardize/normalize costing in the negative externalities of bad behaviour!
I think there is a real risk of this because ESG is tied to material risks - there may be an instinctive rethinking of frameworks.
We’re into the last 5 minutes of the live portion of this session, however, you can keep adding, contributing, commenting and editing your pieces - this platform will stay up.
At close of play tomorrow (Friday) I will turn what is written here into a summary paper, so et your contributions in before then
I would then love to include you and also share it back with you after as a take away. To get your version mailed directly to your inbox, simply sign up here: Join us - Business Fights Poverty
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We need to change our language from economic models to socio-environomic models - to include social, environment and economic parameters
Bye all! This was great. Looking forward to the synopsis.
Thank you for an intellectually stimulating discussion, look forward to the takeaways
Does this then mean that we might consider:
- ways to increase material risks?
- start making it normal (consumer & shareholder perception) to internalize the cost of the negative externalities?
- better track the cost of bad behaviours in ways that resonnate with companies and are logged as costly material risks?
Thanks for facilitating an interesting conversation. Appreciate it very much!
Thanks for the great conversation !
Look forward to the synopsis! Thanks