I couldn’t let this pass without noting it. ESG hit high and low points of ridiculousness within a few days of each other.
The High Point
Low Point #1
Kourtney Kardashian has been named fast fashion retailer Boohoo’s sustainability ambassador. Which, of course, has been received about as well as you might expect. These articles in Fortune and The Guardian sum up most of the media coverage and comments I’ve seen. The Guardian also points out that:
In July, the UK’s Competition and Markets Authority (CMA) announced that Boohoo was under investigation over ‘greenwashing’, the practice of using inaccuracy or exaggeration in branding something as sustainable or environmentally sound. Under particular scrutiny is their ‘Ready for the Future‘ line which vaguely claims that items in this line ‘are made of more than 20% of [sic] more sustainable materials’, an essentially meaningless assertion made with little to no proof.
Somehow, this news reminded me of another recent article in Fast Company – 5 Ways to Tell if Someone is a Real Expert (or Just Really Good at BS). I realize that some may take issue with the use of the phrase “really good” in the context of the above.
Low Point #2
This is from Marie-Josee Privyk’s weekly email newsletter last weekend:
I recently came across (here and here) a new proposed version of materiality in the context of scoping out corporate disclosure requirements: ‘sesquimateriality’ (what the heck is that, right?!). It is proposed as a new version of materiality that lies somewhere between financial materiality and double materiality. It seeks to define decision-useful information for Universal Owners (i.e. large asset owners), which includes information on how companies manage issues that might affect their own financial performance as well as system-level risks (what’s referred to as ‘beta’ market risks in investment speak). I really wonder about the usefulness of introducing yet another complicated term and concept. We know that materiality is a spectrum bordered by financial materiality (how environmental and social issues affect a company’s performance) and impact materiality (how a company affects the environment and society). Where each investor or stakeholder sits on this spectrum may vary. In the end, companies need to do both.
OMG! More gobbledegook jargon intended to appeal only to ESG practitioners is the exact opposite of what we all need. The last “sesqui-” anything I had anything to do with was the 1986 Texas sesquicentennial celebration and I am okay with that.
This comes at a time when there are conversations about whether the term “ESG” needs to be replaced – an idea that simply seems like a waste of time. Even though Robert Eccles (for whom I have immense respect) is one person advancing this idea, I disagree with him on this point.