ESG And The Future Of Work: 3 Strategies Every Leader Should Know
The Forbes article, "ESG And The Future Of Work: 3 Strategies Every Leader Should Know," quoted Russell Reynolds Associates Consultant Kurt Harrison on what could happen if companies do not prioritize ESG. The article is excerpted below.
Earth Day’s arrival on April 22 presents a timely opportunity to consider three letters that should be on every leader’s mind: E-S-G.
These letters, of course, stand for environmental, social, and governance, and assess a company’s commitment to each, be it greenhouse gas emissions and waste disposal (E), labor relations and employee safety (S), or board diversity and supply chain management (G). Though some of these concerns might seem irrelevant to the business world, more and more stakeholders — from BlackRock to consumers to credit rating agencies — are taking notice of ESG ratings.
2. Incentivize Institutional Investors
In 2006, the UN launched its Principles for Responsible Investment. At the time, 63 companies, with $6.5 trillion assets under management (AUM), pledged to integrate ESG into their investment decisions. As of 2020, that number had grown exponentially: to 3,038 companies with a total of $103.4 trillion AUM. Clearly, institutional investors are paying more heed to ESG principles — and leaders should, too.
If companies do not prioritize ESG, Kurt Harrison, co-head of Russell Reynolds Associates’ sustainability practice, warned that asset managers may divest their shares, thereby lowering stock prices and pressuring CEOs.
Access the full article here.